“Lancaster County receives $122,000 in lodging tax receipts meant for York County”

Lancaster County receives $122,000 in lodging tax receipts meant for York County

Posted: 30 Jul 2010 03:03 PM PDT

By ALGIS J. LAUKAITIS / Lincoln Journal Star | Posted: Saturday, July 31, 2010 1:00 am |

Bob Sautter, executive director of the York County Visitors Bureau, is a happy man.

He just got an unexpected windfall: a $122,000 check from the Nebraska Department of Revenue for lodging tax receipts for the past 22 months.

Jeff Maul, executive director of the Lincoln Convention and Visitors Bureau is not so happy. He had erroneously received the $122,000 from the state.

"The money has already been paid back to the state because they withheld it. They figured out they made a terrible mistake. ... It's really not an issue to us at all," said Kerry Eagan, Lancaster County's chief administrative officer.

The Lancaster County Board has oversight over two funds that are used by the Lincoln Convention and Visitors Bureau. The state automatically puts a portion of the lodging tax receipts it collects into those two funds, one for tourism promotion and the other for capital improvements. Eagan said the county found out about the error last week when it received the most recent lodging tax receipts statement from the state.

"The payment was reduced by the amount of the overpayment," Eagan said.

Maul said the $122,000 won't have much impact on the Lincoln Convention and Visitors Bureau's tourism activities.

"It's not a big hit for us going down the road," he said.

Maul said he did not notice the overpayment because there was an increase in tourism in the county last year.

"There was nothing that jumped out that it's got to be a statistical error," Maul said.

State Tax Commissioner Doug Ewald said a taxpayer made the error by not using the right code.

"The Department of Revenue went in and made an audit. We found the mistake. We fixed it and that's the reason for the shift," Ewald said. "Obviously, somebody gets a windfall and somebody pays the price in this situation."

Ewald, who has served as tax commissioner for three and a half years, said this is the first time such a thing has happened during his tenure. He said the coding error affected only York and Lancaster counties.

"I'm sorry for Lancaster County. There wasn't anything they were doing wrong. It was a reporting error, I guess," Sautter said.

He said the error occurred when a person who has lodging property in both York and Lancaster counties paid lodging taxes and sent in one lump sum instead of dividing it. The state failed to catch that the taxes were for two facilities in separate counties.

The $122,000 represents about half of York County's annual lodging tax receipts, Sautter said. The 4 percent lodging tax that goes to the county is collected from hotels, motels, campgrounds and bed and breakfasts.

Sautter said he had noticed about three weeks ago that something was not quite right with the lodging tax receipt collections.

"For the last year our lodging tax receipts have been down just about every month, with the exception of two or three months," Sautter explained.

He thought that was unusual because of York's location on heavily-traveled Interstate 80. So he checked with the owners of hotels, motels and campgrounds.

"Everybody's been pleased with their business for the last year or so," Sautter said. "Something didn't quite jibe there."

He then talked to his counterpart at Madison County Convention and Visitors Bureau in Norfolk. Madison County's lodging tax receipts normally lag behind York County's. To Sautter's surprise, they were were $20,000 ahead.

"There was just a feeling that there was something not quite right," Sautter said.

So, he asked the York County Clerk and a county commissioner to write the Nebraska Department of Revenue to find out if all of the hotel, motel and campground owners were paying their lodging taxes and if they were paying on time.

"I got a fairly quick response," Sautter said; the state Revenue Department told him nothing was amiss.

Next, Sautter called Tom Doering, with the Nebraska Division of Travel and Tourism. He tracks lodging tax receipts for all 93 counties. Sautter faxed York County's lodging tax receipts for the last fiscal year and asked Doering to compare it with his records to see if they matched up.

Doering called him last Tuesday and asked Sautter if he was sitting down.

"Your county's getting a windfall," Doering told him.

Thanks to the windfall, Sautter will go back and redo his budget, which he had to trim before he got the good news.

Reach Algis J. Laukaitis at 402-473-7243 or alaukaitis@journalstar.com.

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