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County is overpaying sales tax, despite exemption, says auditor

Hubbard County is exempt from paying sales tax on purchases, she explained, but employees have been submitting claims to be reimbursed for the sales tax that they paid.

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Hubbard County Government Center Park Rapids Enterprise file photo, March 2020
Park Rapids Enterprise file photo, March 2020

Hubbard County Auditor-Treasurer Kay Rave wants to amend the county’s credit card policy.

Hubbard County is exempt from paying sales tax on purchases, she explained, but employees have been submitting claims to be reimbursed for the sales tax that they paid.

“It’s not fair to the taxpayer,” she said.

Rave said certificates of exemption are easily available that should be shown to the vendor.

“We continue to receive reimbursement requests where an employee has paid sales tax. It has to stop,” she said. “We’ve received findings from the state auditor. These have, so far, been verbal, but it just seems that we’ve received so many I could see this becoming a written finding.”

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The policy amendment would state that “Exempt forms are available from the auditor’s office. Any sales tax incurred will be the responsibility of the employee, as it is not a reimbursable expense.”

County commissioner Tom Krueger asked about the sales tax on a motel room when he traveled to an Association of Minnesota Counties event.

“That is covered,” Rave said, adding she can clarify those items in the policy. “There’s also a solid waste sales tax that we have to pay, legally.”

Rave said she would happily email every employee the certificate of exemption.

County Administrator Jeff Cadwell recommended tabling the amendment until the Minnesota Statute has been reviewed.

Rave agreed to clarify the amendment to get the wording correct, plus review any other procurement policies that should be similarly revised “so that we’re not paying sales tax unjustly.”

“If we have a process in place that’s relatively painless to follow, we should follow it,” agreed board chair David De La Hunt.

The board tabled the matter until the Jan. 18 meeting.

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In related business, the county board accepted a $64,363 VEGA-3 Grant to replace outdated election equipment. According to Rave, the grant will replace AutoMark assistive voting devices with OmniBallot assistive voting devices for eight precincts and replace M100 Ballot Counters with DS200 Ballot Counters for five precincts.

Related Topics: GOVERNMENT AND POLITICS
Shannon Geisen is editor of the Park Rapids Enterprise.
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