Blue River treasurer offers clarity about local tax question
November 5, 2013
On Tuesday, voters in Blue River will cast their ballot to determine, among other issues, whether or not the town should impose a 2.5 percent sales tax on its residents. (Currently, there are no retails businesses in Blue River. However, there could be if the town changed its zoning rules.)
The initiative, known as Referred Issue 2D, was drafted in part because local officials believe revenue from sales taxes assessed on local utility bills are being diverted to the town of Breckenridge, rather than staying in Blue River.
Although Breckenridge officials dispelled that notion last week, it was still unclear whether or not Blue River residents are being assessed a "town" or "city" sales tax on their utility bills. Although one Blue River representative said last week he is being assessed a city tax on his cable bill, Comcast officials have not been able to confirm those claims with the company's accounting department.
However, following last week's report, Blue River resident Toby Babich said in an email to the Summit Daily News that he is not assessed a local tax on any of his utility bills. Babich also said he pays county and state taxes, raising further questions about how the town plans to capitalize off $47,000 in estimated lost revenue.
“It has a lot to do with the way utility companies code their fees and it is even more confusing (in Blue River) because taxes vary on a property-by-property basis. In some cases those funds are going to Breckenridge because we share the same ZIP code, in others they are going to the county.”
Local accountant and treasurer for Blue River
Alan Mosher, a local accountant and treasurer for Blue River, was instrumental in drafting the ballot question. On Monday he said Babich is correct that companies are not assessing a town tax on utilities.
However, Mosher said a portion of county and state sales taxes local residents are paying on their utility bills do revert back to Summit County to benefit local municipalities. The sales tax initiative would therefore allow Blue River to capture its share of those revenues, Mosher said.
"It has a lot to do with the way utility companies code their fees and it is even more confusing (in Blue River) because taxes vary on a property-by-property basis," Mosher said. "In some cases those funds are going to Breckenridge because we share the same ZIP code, in others they are going to the county."
Marty Ferris, finance director for Summit County, confirmed Blue River residents, in addition to all county residents, are paying a 2 percent sales tax on utilities. However, the county only collects those revenues generated from unincorporated areas in Summit County. Since Blue River is an incorporated town, officials should already be receiving tax payments from utility vendors, Ferris said.
But Ferris, who lives in unincorporated Summit County, said she was once assessed a city tax on one of her utility bills, which she had to rectify with that vendor herself.
Citing lessons learned from that experience, Ferris said the only way Blue River officials could determine whether or not there is a discrepancy in revenues is to look at the tax records for each individual property, Ferris said. The county does not maintain utility tax records by address, Ferris added, but the state does.
If the ballot measure passes, Blue River officials would be able to compare its sales tax data with the state's to determine the source of those potential lost revenues, Ferris said.