Bethel’s new City Council has voted 4-3 to create an amnesty program for certain business owners who owe the city unpaid sales taxes. The program will only apply to penalties and interest on unpaid sales taxes.
Those who qualify for the program, aims to get more business owners in compliance, will still owe the taxes themselves. The program will be available for those who owe sales taxes between Oct. 1, 2019 and Oct. 1, 2020.
Newly elected council members were sworn into their roles on Tuesday. Rose “Sugar” Henderson is the only incumbent. The three newcomers are Patrick Snow, Sophie Swope, and Henry S. Batchelor Jr.
Council member Mary “Beth” Hessler authored the proposal. She’s one of the business owners who found out recently that she owed sales taxes to the city on a duplex she owns. She rents part of it out.
The new ordinance would not apply to city council members. Hessler said that not everyone who owes the city unpaid sales taxes is dodging them intentionally.
“With the number of people that are being surprised with how the code actually is, I thought it would be fair to give people the opportunity to forgive penalties,” Hessler said.
This comes after a new city finance director started cracking down on businesses that haven’t been paying the city the sales taxes they collect. Duane Wright has been more aggressive than past directors in auditing businesses suspected of not paying the city sales tax. Wright said that the penalties can be as much as three or four times the amount of taxes businesses owe.
He estimates that the city could be leaving millions of dollars in just unpaid sales tax revenue on the table, not including those fees. Wright said that he thinks, optimistically, only about 20% of local business owners have been paying sales taxes to the city. Wright said that he’s been having trouble getting businesses owners to respond in his push to collect that revenue.
“There’s a lot of money that’s not being paid. The general attitude, if they do communicate, is very adversarial,” Wright said.
Council member Batchelor Jr. voted against the ordinance Tuesday night. He doesn’t want business owners who have been ignoring the new finance director’s requests for compliance to be able to apply for the amnesty measure.
“Any of these people that have been stonewalling the department, that have been failing to reply, they should not be capable of getting any amnesty,” Batchelor Jr. said. “Because they were effectively saying ‘we’re gonna wait until something changes.’”
The new ordinance excludes business owners who are in the process of negotiating a compromise or settlement agreement regarding unpaid taxes. They’re not eligible for the amnesty program.
Council members Batchelor Jr., Swope and Henderson voted against the ordinance. Members Erik Whitney, Mark Springer, Hessler and Snow voted in favor of it.
The council also voted to certify the results of the Oct. 4 election. Besides the city council election, two ballot measures were also before voters last week.
In one of those ballot measures, voters chose not to allow businesses to sell beer and wine outside of restaurants. The other, which passed by only a 22-vote margin, will prohibit the city council from enacting future mask mandates.