Stimulus checks save tax base from Coronavirus

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By Juanice Gray, jgray@natchitochestimes.com

Tax Commissioner Jerry McWherter said, “Revenue has not been that bad in light of Covid-19, due to the fact we had such a good economy in 2016, we had cushions. We never went into the negative.”

Motel 6

Those businesses showing growth during the pandemic include grocery stores, convenience stores, all food prep industries, home improvement stores and liquor sales. Retail businesses and restaurants took a hit. The commission, at their regular meeting July 16, attributed the stable numbers to the stimulus checks and unemployment supplements. “It is a false bubble,” said commissioner John Richmond.

“It’s not a continuous pattern,” McWhorter said. “Overall, our yearly numbers were positive. That one time influx of money gave us a boost.” He said the state program for e-filing taxes were down. Retailers are unable to file online with the state. He expects an extended deadline since taxes are due on the 20th. He said waiver of penalties and fines were given to all whom asked for it in March and April.

By visiting airbnb.com one can enter the zip code and locate air BNBs in the area

The commission spent much of their meeting discussing the collection of taxes for air BNBs operating in the parish. Airbnb, based in California, is willing to enter into an agreement with the tax commission to collect taxes from the 57 air BNBs in the parish. No local taxes are currently being collected. The tax commission has not signed the agreement. McWherter said he commissioned an audit by a third party auditor to cover the period from Jan. 1, 2017-June 30, 2020. The purpose is to review all financial data to determine if tax is due to the taxing authority. McWherter said by the time an audit is necessary, no waivers or agreements are considered.

“We will collect the taxes and our intention is to go back three years and collect,” McWherter said. “The money will be collected, just not today.”

Assistant District Attorney Steve Mansour asked McWherter why the tax commission wouldn’t enter into an agreement with an entity willing to collect the tax from the air BNBs and remit it to the tax commission. McWherter said the agreement would have to be between the property owner and the internet host (airbnb in this instance).

This map from the airbnb website depicts air BNB prices and locations in the parish.

Laura Jeffcoat with the tax commission said most air BNBs want to do it themselves and not through the larger company. Mansour said the process by which guests book rooms is online through the airbnb website. Taxes are collected at the time of booking, not locally at check-in.

McWherter said the tax commission has to know about all the air BNB properties and owners to collect taxes and the audit should reveal that. Commissioner Julie Lockhart asked why he didn’t compile a list and tell airbnb what the individual rates are. Different areas of the parish have different taxing structures. He was also asked why his office did not reach out to airbnb to get that information. He replied it was airbnb’s responsibility to contact his office. He said, “It’s not my responsibility to collect from vendors. We’re not doing anything because we are in an audit,” he said. “We entered into a protocol with a professional audit business and we’re following that protocol. This is audit policy and procedure.”

The audit results are not complete since the audit period only closed June 30. It will take time for that to happen. In the meantime, commissioners asked if air BNB taxes could be collected beginning July 1, the date after the audit closed. Richmond asked, “If they (airbnb) come in good faith with an offer to begin collecting and remitting taxes, would you (the tax commission) be open to that and take action before the audit results are in?” McWherter said he would be open to that, however, they (airbnb) would have to contact them. “We can’t reach out to them,” he said, citing audit protocol.

During the budget portion of the meeting, Richmond commended McWhorter’s office for having a low internal audit expense. McWherter said in the past 13 years, the commission had collected roughly $6.9 million in taxes through audits at a cost of only roughly $472,000 in fees, which is only a 6.8% cost. McWherter said once an audit is complete and payments are made, the audit fees come from net funds collected. He asked McWhorter to make that report readily available for better transparency. “You have a very efficient system,” Richmond said.