By: Diana Johnsen
djohnsen@kcautv.com
The Nebraska Department of Revenue has a tough pill for the city of Norfolk to swallow.
"They said that they were going to be refunding $544,000 dollars of city sales tax to a business that had paid it in error," said Randy Gates, City Finance officer.
The city of Norfolk will loose over half a million dollars because of an accounting error.
"Long term, that $544,000 dollars is going to mean $544,000 dollars of reduced services to our citizens or $544,000 dollars of other revenue that has to be collected from our citizens," Gates added.
The error actually began 14 years ago back in 1999.
That year, an un-named Norfolk business paid city sales tax for six years when it didn't have to because it was outside city limits.
The error was discovered after the Department of Revenue started an audit in 1996 that was unrelated to the local sales tax issue.
The Department became aware of the error in 2007 but thought it was only a $30,000 dollar refund.
Gates said the city didn't notice the issue over the six year time span because of fluctuating sale tax rates.
"If it would have all happened in a short period of time, we would have known something was happening. But when it's spread over a 6 year period, it just got lost in all the ups and downs of sales tax."
The city said the over half million dollar refund will make budgeting for next year very tough.
