Lodging Panel Gets Long-Awaited Answers to $$$ Questions

LuAnn Pyatt, CO Dept of Revenue Liaison

It all depends on who you talk to! The Prowers County Lodging Tax Panel has sought answers over the years, as to how the Panel receives its funding from the state, based on local motel room taxes.  The 2% tax generates on average, $85,000 a year which the Panel distributes to tourist-oriented events in the county.  How those taxes are handled at state level, when they are sent out to the counties and what type of accounting is in place for these funds have been unanswered…until this past Monday, May 23^rd.  LuAnn Pyatt, Local Government Liaison from the Colorado Department of Revenue, met with several Panel members and Prowers County Commissioners, to answer those questions. Pyatt explained that her office handles both lodging and sales taxes.  “We treat both payments separately.  The County Lodging taxes use paper for the returns, it’s not online,” she said, adding that each community has a jurisdictional code for identification.  The mailings come to Denver from the surrounding counties and are processed through a separate state agency that prepares or formats the information to be put into the billing system.  “We use a notification system for non-filing clients which issues a notice for a missed due date and if they continue to be late, the department runs a balance due report for their past 12 month history, plus a 10% charge on filing the information.  If there’s no response after that, we consider legal action on delinquent accounts.”

Pyatt said there should be about a 20 day turnaround from taxes received to the state, to reimbursement back to the counties for the lodging tax payments. That came as a shocker to the Panel members.  She explained that if the quarterly taxes were due on April 20^th, the process should issue a payment back by May 9^th.  An itemized list of payments is sent to the County Clerk and Recorder which does not go to the Panel.  Panel members also wanted to know why they would get a check for $13,000 and a follow up check a month or so later for $3.27 with no explanation for it.  “That’s from tardy payments to us,” Pyatt said, “We don’t let the late ones accrue for the next quarter, we just find it’s easier to send them on to the counties, no matter the size of the check.”

She said the state takes a percentage of the taxes, and it’s minor, but complicated and is done through the state comptroller’s office and not through her department. Carla Scranton, the Panel’s business manager, stated that they were told the turnaround was around 90 days.  “Is that 30 days normal, because we’ve been told several times that it was 90 days from the time you received the quarterly taxes to the time we’d receive them.”  “So the money we would receive in May would have been from the first quarter of the year?” asked Pat Palmer, Panel President.  Jane Felter, who owns a bed and breakfast in Lamar, reaffirmed the point, asking, “And when we file again on July 20^th, then we should get our funding back by around August 10^th?”

Pyatt told the group that she didn’t know who had given that information to the Panel, but it was not correct, “It’s unfortunate that was told to you, even when you called back later with the same request. We never hold anything back for that length of time.  You may see a few dollars sent during the off months, but at the end of the quarter you’ll have the larger payment.”

Palmer said he was quite happy the panel finally got a correct response to their questions, “It’s amazing, you’ve put out a lot of the heartburn I’ve had since the beginning of the Panel on these questions. I personally visited the capital and was sent to whatever legislators who probably don’t want to do anything and no one could tell us what you just explained in a few minutes.  We didn’t always know where we stood with our finances when someone came to make a funding request, so this gives us some very important information.  Thank you!”

The Panel had tried to back track the quarterly payments, using the Lamar monthly City Sales Tax Revenues that separate payments into 12 retail categories and services, of which motels is one, but it never jived with the payments to the Panel. Pyatt explained that there are some instances in which government employees and non-profit organizations are exempt from payment of taxes which could account for the discrepancies.  She said she’d have her department mail a list of FYI brochures to local motels to give them specific examples for the tax process.

By Russ Baldwin