From the pages of
Sublette Examiner
Volume 3, Number 32 - November 6, 2003
brought to you online by Pinedale Online

County to pay sales tax

by Cat Urbigkit

Blake Davis, Rick Foley and Dave Andrews of Hogan and Associates spoke with Sublette County Commissioners Tuesday about the sales tax burden associated with the Big Piney Library construction project. Hogan and Associates served as the general contracter for the project.

"First of all, there is no profit in this deal for us," Andrews said. He explained that he asked Sublette County Clerk Mary Lankford if the project was tax-exempt.

"We came to the conclusion that this project would be tax exempt," Andrews said.

Andrews said he assumed Hogan was acting as agent of the county, so the project would be tax exempt after talking with Lankford.

Andrews explained a timeline, beginning last October with Lankford requesting an opinion from the county attorney's office about the tax-exemption issue. Meanwhile, Lankford gave Hogan a copy of the county tax exemption certificate in January 2002, while still waiting for the county attorney's opinion.

The Big Piney Library project design work was completed and the bid spec package released, noting that the project was tax-exempt, so bids should not include sales tax. It was November 2002 when then-county-attorney Dale Aronson issued a letter declaring that the project was not tax-exempt. But by that time, the contract for the job had been signed and the library had been under construction for four months.

Andrews explained that his company responded by sending out a memo to its subcontractors. Hogan and Associates then began receiving invoices for sales taxes due for materials used in the building and prepared change orders for the county. The library board paid one of the change orders, then eventually deducted it from the next check to the company.

Andrews explained that Hogan now has invoices totaling $27,075.13 for the sales tax due on Big Piney Library project.

The commission has debated its liability for paying the sales tax, maintaining that Hogan should have known the tax status.

On Tuesday, Commissioner Bill Cramer said, "If the representation was made to you that we were tax exempt and in fact we weren't ... I think perhaps we owe it."

Cramer added that from the information presented, "that's the case."

Deputy Sublette County Attorney Marilyn Filkins pointed out that in asking about the tax exemption status in October, then coming back to the county three months later seeking written proof of the tax-exemption status, "you (Hogan) had a concern" as to whether in fact the project was tax-exempt.

"You were on notice at that point," Filkins said, adding, "My point is it's not quite that cut-and-dried."

Cramer noted, "We accepted bids without sales tax, so I think we owe it."

Although the library board has refused to pay the $27,075 in change orders for the sales tax, the commission told the Hogan representatives to submit the orders on a voucher to the commission itself.

Although no vote was taken, and no commitment was made, the commission did generally indicate that it would act on the voucher.

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