Tonawanda News

The Town

October 25, 2012

Town proposes $108,000 payment for back sales taxes

Tonawanda News — TOWN OF TONAWANDA — Officials are offering $108,000 to settle with the state Department of Taxation and Finance after discovering sales taxes had never been paid on the Youth, Parks and Recreation department’s sales since they began in the 1950s.

“We knew we made a mistake here,” Town Attorney John J. Flynn said. 

The town is requesting a three-year look-back period from the state with help from the law firm of Phillips Lytle, LLP for negotiation purposes. 

“The recreation department added up their revenues from the previous three years, 2009, 2010 and 2011,” Flynn said. “That’s how they came up with the figure.”

The $108,000 is mainly comprised of sales at the town’s two hockey arenas, but also includes crafts sold at playgrounds, golf cart rentals, the auctioning off of vehicles and resale items at the Aquatic and Fitness Center. 

Flynn said the town is applying for the state’s Voluntary Disclosure Program and are waiting to hear back from state officials. 

According to the department of taxation and finance website and spokesperson Cary Ziter, the program allows a taxpayer to report and pay the taxes they owe without penalty.

Ziter also said any government entity is responsible for filing sales tax on items that are “not unique to government” — things like concession stad sales and golf cart rentals.

“A town concession stand sells a hot dog just like Ted’s,” Ziter said. “That’s a taxable item because it’s not unique to government.”

In comparison, the town doesn’t have to file taxes on the cost for providing a birth certificate, because the action is solely a government responsibility.

In respect to the taxable items, Flynn seemed optimistic about the town’s prospects with the state. 

“The state regularly accepts people into the program,” Flynn said. “We are very hopeful that we will be.” 

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