Tax oversight to be fixed
Hundreds of local businesses could owe more in taxes this year as the Teton County Assessor’s Office seeks commercial personal-property taxes that have gone uncollected for years.
“This is not anything new,” Assessor Melissa Shinkle said. “This is just a matter of catching up because it hasn’t been done for years in this office.”
Each year, the assessor receives a list of businesses operating in the county that charge sales taxes. The assessor is expected to tax businesses’ property that is used to generate income.
Of the 2,158 businesses licensed in Teton County, 866 had not been paying personal-property taxes, Shinkle said. (Some haven’t been taxed for years while others may be legitimate new businesses). All 866 were mailed a letter Dec. 3 requesting an inventory of their business’ assets for taxation.
Jenny Bragg has operated hair salon Jackson Parlour for six years, but she said this winter was the first time the county asked her to detail the value of her business’ assets — like chairs, shears and mirrors — to be taxed at 9.5 percent.
Initially, Bragg was shocked and frustrated about what she saw as the burden of an extra tax hike on her small business. But after Shinkle emailed her to explain, Bragg said she felt better understanding where the tax comes from and where its revenues go.
“After learning 75 percent of the tax goes to public schools — I’m absolutely 100 percent on board to pay taxes, if I know what it’s from and why and where it’s going,” Bragg said.
Shinkle was clear that she does not fault the business owners.
“Most taxpayers don’t even know,” Shinkle said. “I think there needs to be better information from the state on the reporting of personal property when a business obtains a sales tax license.”
The inconsistency in business property taxes stems from former assessors’ and staffers’ inability to keep up with the responsibility to tax businesses’ property: “It was simply put on the back burner,” Shinkle said. The audit and request for reporting from all businesses countywide should have happened years ago and will occur every year from now on, she said.
Wyoming state statutes require county assessors to tax property owned by businesses — from computers to machinery to cameras. Businesses must annually report an inventory of those items, on the honor system.
Shinkle said she has no idea how much revenue may have been lost over the years by failing to tax businesses’ property, but Teton County’s revenues probably pale in comparison to mineral-rich counties. In oil and gas counties, the tax brings in a lot of cash. In 2018, tangible items owned by Teton County businesses were valued at $152,753,569, yielding about $888,748 in tax revenue.
The Teton County Assessor’s Office has been working hard to implement a 2016 order from the State Board of Equalization that demanded the county immediately fix historic undervaluation of property, especially commercial property. The result was a 17 percent increase in overall property tax assessments countywide in 2018.
The crackdown on taxing businesses’ personal property isn’t part of that state order. But Shinkle, who first took office in August 2017, said after reviewing the sales tax license list from the state, “it was apparent we were really behind.”
“It’s about being fair and equitable,” she said, “and it’s definitely not fair for some businesses to faithfully report and pay, while others do not.”
However, as the state Legislature continues to search for sources of revenue, reporting and tracking of businesses’ property could become stricter.