Our View: City should have acted

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Editorial Board, Sept. 25, 2011, to January 2012

  • Scott Stanford, general manager
  • Brent Boyer, editor
  • Tom Ross, reporter

Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com. Would you like to be a member of the board? Fill out a letter of interest now.

While the number of county residents who are charged city of Steamboat Springs sales tax on their monthly Verizon Wireless bills remains unclear, the city shouldn’t be let off the hook for not making an effort to notify residents of the issue, even while they continued to collect and spend the tax revenue.  

Verizon officials said Tuesday that the company’s billing software differentiates between city and county residents and that any wrongly assessed city sales tax likely is the result of the customer using an old address or a city P.O. box for their account. Neither the city nor Verizon knows how many affected customers are out there. Similarly, the amount of improperly assessed sales tax that has landed in city coffers throughout the years is unknown. 

But there’s no excuse for the city of Steamboat’s inaction on the issue. Deputy City Manager Deb Hinsvark clarified Tuesday that the city first became aware of the issue in 2007 and has communicated with Verizon on numerous occasions. She said the city essentially was told Verizon couldn’t do anything about it. 

However, there were some easy steps the city could have taken to alert county residents of the problem. For example: a notice in the city’s biweekly City Page advertisement, a posting on its website, a briefing to any of the sitting City Councils of the past five years or simply a call to the Steamboat Today. Any of those actions could have made affected residents aware of the issue.

Instead, the city has continued to collect and spend those sales tax revenues. And although it’s difficult to come up with an accurate dollar figure of improperly assessed sales taxes, that’s perhaps less significant than the fact that some city officials were aware of the issue and still allowed the collection and expenditure of the revenues to continue. 

So now, the city is offering refunds to Verizon Wireless customers who can provide monthly billing statements for up to three years showing improperly assessed sales taxes. That’s all well and good, but it doesn’t excuse years of inaction.

Comments

Scott Wedel 2 years, 9 months ago

Well, City could play hardball with those outside of SB and ask for them to document that their primary point of usage was outside of city limits. Considering how many people work inside SB city limits that live just outside city limits, then the City could have been entirely justified believing that very few of those that live outside of city limits are legally not obligated to pay the city sales tax.

In fact, city residents that pay the tax would appear to be just as entitled as nonresidents to offer evidence that their primary point of usage is outside of city limits and get their tax refunded.

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Dan Hill 2 years, 9 months ago

@Scott Wedel - do you have some source for this idea that sales tax on cell phone service is based on the location of usage rather than the billing address? I don't think so. Such an approach would be impossible to enforce.

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Scott Wedel 2 years, 9 months ago

http://www.steamboattoday.com/news/2012/feb/14/verizon-wireless-asks-routt-county-customers-help-/

John Cmelak, a tax policy director for Verizon, said Tuesday the federal Mobile Telecommunications Sourcing Act requires that wireless companies tax customers based on their “primary point of usage,” which isn’t necessarily their home.

And while obviously, while Verizon is not using the location data from the phones and towers to determine the primary point of usage, they do have the technical ability to do so. So it could be enforced.

And City would certainly be within their rights to look at the person asking for a rebate and not give it to people that work within SB and heavily use their cellphone as part of the job (ie real estate agents).

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sedgemo 2 years, 9 months ago

Aren't you all sort of missing the point that these are MOBILE phones? By definition there isn't a single location of usage. I use mine everywhere and do not have a desk job in town. I don't live in town either but have an 80487 mailing address (no mailbox where I live) and have been unknowingly paying this tax for over two years.

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captnse 2 years, 9 months ago

Just like paying tax to the ski corp. Our City government is corupt collecting our Tax dollars in an illegal fashion. The city Needs to admit their mistakes and make An effort to pay back all their illgotten tax revenue.

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mtroach 2 years, 9 months ago

How about reading your bill? Taxes are plainly stated on the bill, anyone could have protested this without needing the city to act.

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sedgemo 2 years, 9 months ago

Roach, I read mine but wasn't aware they were optional via the county vs. city distinction that was possible with wireless phone service. On the other thread one Verizon owner's bill only states it as a Routt. Co. tax under the same circumstances. It seems a bit arbitrary how they identify the tax.

Also I noticed the city is charging 1% of the .25% Ski Corp. tax to cover the work involved... how was the work involved collecting phone use taxes covered? By using the taxes themselves or some other source? I realize the dollars are not the same volume, but the principle is the same.

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sledneck 2 years, 9 months ago

By some of you guys' logic I should stop in every municipality and county I drive through and give them a token for my car passing through.

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Scott Wedel 2 years, 9 months ago

Is it really that hard to understand "primary point of usage"?

That doesn't mean paying some every place you pass through.

It does mean that some people whom live outside of city limits, but primarily use their cell phone for work inside of city limits then their primary point of usage is their place of work, not their home.

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Scott Wedel 2 years, 9 months ago

Prove what? That the federal Mobile telecommunications act which says taxes are to be paid based upon the primary point of usage does not mean that customers are supposed to pay a small amount for each town they pass through?

Well, okay. The definition of "primary" means that the customer is to pay all of the sales tax according to the one area that is most heavily used by the customer. It specifically means sales tax will not be paid some here and there.

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