The Colusa County Board of Supervisors approved a contract with an auditing firm on Tuesday to provide an independent analysis of the county’s sales and use tax records.
The board unanimously agreed to allow Hinderliter de Llamas and Associates access to the county’s confidential sales tax records, maintained by the California Department of Tax and Fee Administration, to determine if there are any deficiencies or errors in sales tax collection in Colusa County.
HdL would also help the county recoup lost revenue if such deficiencies exist, said Chief Executive Officer Wendy Tyler.
“This is a contract to have Hdl on a regular and continuing basis to monitor through the (CDTF Administration) our sales tax receipts within unincorporated Colusa County to make sure that the taxes we are supposed to be receiving into county coffers are actually coming in,” Tyler said. “That is something that we don’t currently do. We take the state at their word that vendors, as they are submitting their sales taxes, are doing it the right way, and the appropriate proceeds are coming into the county as revenue.”
The Board of Supervisors, in their ongoing discussion about a possible tax increase, said they first wanted to look at where sales taxes are generated, whether through the purchase of gasoline along Interstate 5 or on agriculture equipment, which could be deal breaker if farmers and ranchers would choose to take their business to a county with a lower tax rate.
In addition to Hdl, Tyler and County Auditor-Controller Robert Zunino would have access to the tax information, which can also help the county in general budget planning and economic development purposes, officials said.
The contract with Hdl is for a flat fee of $7,200 ($400 per month) annually, plus 15 percent of any recovered revenue for a period of two years.
If the county chooses to enter into an agreement for Hdl to monitor the receipts of future sales tax measures, then the company would be entitled to $200 additional per month plus 25 percent of any new revenue for a two years.
The contract with Hdl is for an initial term of 12 months, and would automatically renew without a 120 notice by the county to cancel.
Supervisor Kent Boes suggested the board review the contract in August to make sure the service pays for itself through recovery of lost revenue from sales taxes that have been paid to the wrong jurisdictions.
Boes said the county would need to recover about $9,600 a year in lost revenue to break even.
“If we can find $10,000 a year, it pays for the service,” Boes said. “We could then keep doing it because it would be a good service to have. If we are finding $200 or $300 in additional tax revenue annually, it wouldn’t (pay for itself). It’s good to audit and make sure we are getting what we are getting…but.”
The contract was approved 5-0. ■