Steamboat Springs Verizon Wireless officials said Tuesday that the company’s billing systems are capable of differentiating between city and county addresses but that they need their customers to update their account information to ensure accuracy.
Company spokesman Bob Kelley said Verizon needs the most specific address information for its customers so that only the appropriate taxes are levied against those users. That address information includes a home address and a nine-digit zip code.
“It’s the information that the customer provides to us in terms of address,” he said. “If it’s simply a post office box or rural route, the customer data may not be precise (enough) to pinpoint where they use the service.”
The issue arose this week when it became public that at least some Routt County residents have been charged city of Steamboat Springs sales tax on their monthly Verizon bills. The number of affected customers is unknown, as is the amount of money improperly remitted to the city.
Kelley said customers need to provide the most accurate, up-to-date address information to be taxed correctly. He said customers could visit www.myverizon.com or call *611 from their Verizon wireless phones.
Deputy City Manager Deb Hinsvark, who was hired as the city’s finance director in December 2009, said Tuesday that the city first learned of the taxing issue in July 2007, not 2009, as was reported Monday. She said the city immediately sent a letter and called Verizon to get the issue resolved, without success.
City Finance Director Kim Weber was the city’s revenue supervisor in 2007. At the time, she said, the issue was discussed among the finance staff, including the then-finance director.
“It was not taken to the City Council at the time,” Weber said. “We don’t take tax information to City Council because it’s proprietary, and we need to protect the collector. That’s the way legal has directed us.”
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. He said a customer’s physical address including his or her nine-digit zip code should allow Verizon software to pinpoint where the customer is located.
Cmelak said the tax assessment issue has occurred in other rural areas that don’t have their own U.S. Postal Service boxes. For example, the sales tax issue isn’t a problem for residents of Clark, Phippsburg or Toponas, which are unincorporated towns that have their own post offices and zip codes.
Cmelak said it’s up to customers to let Verizon know if they’re being taxed incorrectly because their billing information doesn’t include a physical address.
“Only they know where they primarily use their wireless service,” he said. “We don’t. It’s kind of like, help us help you.”
However, it’s unclear how customers resolve issues related to physical billing addresses that don’t match up to the credit cards associated with their Verizon accounts — as could be the case when residents who live outside city limits receive mail at a Steamboat Springs post office box, which carries a different, Steamboat-specific zip code.
Hinsvark has said that the city will refund county residents improperly charged the city sales tax for up to three years. She urged people to bring copies of their bills to City Hall with a cover sheet that details how much they paid each month.
Weber said that as of Tuesday afternoon, only four people had called city finance staff to inquire about a refund. She said the city has issued refunds to a total of five county residents since 2007; two others simply wanted the issue corrected for future billing cycles.
Weber said she would continue communicating with Verizon to address the tax issue. During Tuesday night’s City Council meeting, Weber said the city hadn’t received a response to any of the three letters the city sent to Verizon between July 2007 and January 2011.
“They aren’t undercollecting, so we can’t do any sort of assessment or legal action for our code other than keep trying,” she said.
City Manager Jon Roberts expressed his frustration with the issue during the council meeting.
“If a vendor, any vendor, is inappropriately charging someone taxes on behalf of the city, that is unacceptable to me. ... I would like to work with the city attorney to the extent possible to make sure this never occurs in the future,” Roberts said.
Kelley said Verizon wants to fix the problem.
“We want the information to be correct,” he said. “We rely on the completeness of the address that we receive from a customer when they sign up for service. We want it to be correct and for them to be taxed appropriately.”
To reach Jack Weinstein, call 970-871-4203 or email jweinstein@SteamboatToday.com