Volume 3, Number 28 - October 9, 2003
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Tax bill hits county construction
Rick Foley of Hogan and Associates Construction spoke with Sublette County Commissioners Tuesday about the sales tax bill associated with county building construction projects and who should pay that bill.
Foley reported that when Hogan began work as construction manager for the county, the company asked the county if the project was tax-exempt, because the county, as a local government, is tax exempt. He said Hogan was told the project was tax-exempt, and added that the company subsequently received a certificate of tax-exemption.
That tax exemption cited Wyoming Statutes in noting that the county is tax-exempt.
"We did this on the theory that as construction manager, we were acting as an agent for the county," Foley said.
He said that 11 months after receiving the certificate, the company learned that it wasn't tax-exempt after all. Meanwhile, the sales tax bill now totals about $29,000, Foley said.
It was explained that if the tax-exempt entity purchases the materials itself, the tax exemption applies. But the tax-exempt entity can't pass that exemption on to others, such as subcontractors.
County Commissioner Betty Fear responded, "But I'm not willing to eat that sales tax," to which Commission Chairman Gordon Johnston responded, "Me either."
Johnston said there appears to be three options for the payment of the tax: the county, Hogan or the subcontractors.
Fear said it seemed odd to her that a company as large and experienced as Hogan wasn't aware of the tax situation, especially considering it has performed other governmental construction projects within Wyoming.
"We did ask and we received the certificate of exemption," Foley responded.
Commissioner Bill Cramer suggested that if perhaps the county had represented to Hogan that the project was exempt, when in reality it wasn't, "we may have some responsibility there."
The commission and Graham discussed whether it was a mutual or unilateral mistake.
"It looks mutual to me," Johnston said, but added that he agreed with Fear, "that Hogan should have known."
"It sounds to me like the claim will be denied," Cramer concluded in his address to Foley. The total claim would be denied, he said, but Johnston suggested that the commission might eventually agree to fund part of the sales tax bill.
"We haven't slammed the door totally," Cramer told Foley.
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