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HomeMy WebLinkAboutRoom Tax DiscussionDESCHUTES COUNTY Finance Depaa-trnent MEMORANDUM MORANDUM DATE: March 18, 2013 TO: Tom Anderson FROM: Marty Wynne Finance Director and Treasurer RE: S & S Pence Investments' Room Tax Payments Attached please find two attachments: (1) Letter to S & S Pence Investments dated February 22, 2013, and (2) Letter from S & S Pence Investments dated 3/7/13. As you are aware, S & S Pence Investments has fallen behind in making payments to the County for room tax revenue it has collected. Furthermore, it was discovered in a recent audit that room tax revenue was collected but not remitted to the County regarding cleaning fees and Internet access fees. This omission was not brought to the attention of S & S Pence Investments in previous audits, which was an oversight by our audit staff. Due to the fact that our auditors should have apprised S & S Pence Investments in previous years regarding cleaning fees and the Internet fees, it is my recommendation that the Board of County Commissioners waive the penalties of $13,662.67, which is the amount related to these fees as itemized in the attached correspondence. It is further recommended that the Board approve the extension of time for the remittance of the late payments as set forth in the attached documents. If the Board approves the extension of payments and S & S Pence Investments does not make payments in accordance with the extension schedule, the County will be forced to take legal action. Mr. Pence and his company have faithfully remitted the full amount of room tax due the County for many years. He has experienced unusual, and, I believe, non-recurring circumstances in the past two years, in addition to the problems all property owners in the Sunriver area have experienced due to the downturn in the economy. Copy: Mark Pilliod Cheryl Circle 'ES Deschutes County Finance Department 0 { Marty Wynne, Finance Director and Treasurer February 22, 2013 S & S Pence Investments Sunset Lodging Attn: Scott Pence PO Box 3515 Sunriver OR 97707 P.O. Box 6005 • Bend, OR 97708-6005 1300 NW Wall St, Suite 200 • Bend, OR 97701-1960 (541) 388-6559 • Fax (541) 749-2909 www. co. deschutes, or. us Re: Deschutes County Transient Room Tax Based on our meeting of February 14, 2013 in regard to transient room taxes due Deschutes County, we have projected the amounts due pursuant to a repayment schedule which you agreed to provide: 1. Taxes owing for August and September 2012 projected to June 30, 2013 total $57,207.33. Repayment of these taxes to be completed by June 30, 2013. 2. Taxes due relative to cleaning and Internet access fees for the period of September 2009 thru August 2012 projected thru June 30, 2014 total $73,231.88. Repayment of these taxes to be completed by June 30, 2014. The attached spreadsheet details the transient room taxes due and projected penalties and interest. Please review this information and respond back to us by March 8, 2013 with your confirmation of the proposal, detailing the repayment schedule. Based upon your stated intention to satisfy these obligations over the nest two years, I wanted to inform you that the code requires that 1 submit this matter to the Hoard of County Commissioners with your requested extension offline. The Beard will also address the assessment of penalties, otherwise imposed by the code. 1 will recommend that the Board grant the extension and, assuming payments are received in accordance with the approved extension, that the Board waive assessment of penalties totaling $13,662.67. Please be advised that if the extension is granted interest will accrue at the rate of one percent (1%) per month on the amount of Tax due. 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ServiceSets Us Apart rs- To: Marty Wynne — Deschutes County Tax Administrator From: Scott Pence — S and S Pence Investments — Dba Sunset Lodging Re: Deschutes County Transient Room Tax Date: 3/7/13 Marty, Per your request in the letter dated February 22nd, 2013, I am following up with a proposed payment plan on: 1. Taxes owing from August and September of 2012 projected to June 30th, 2013 of $57,207.00 2. Taxes owing as a result of the findings in the recent audit related to cleaning and internet fees in the amount of $73,231.88. Item 1: Payment Plan: March 2013 — June 2013 March $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 33,207.33 $ 57,207.33 *Please note - $10,000.00 was paid on February 14th. Item 2: As per your letter, I would like to request that I make a final proposal after the Board of County Commissioners has made a decision on the penalties which amount to $13,662.67. If they choose to follow your recommendation and waive the penalties due to the previous errors by the auditing firm, the outstanding amount will be $59,569.21 as opposed to $73,231.88. Scenario 1 Payment Proposal — The commissioners agree with your recommendation and the amount is $59,569.21: Deschutes County - Audit July $ 5,000.00 AuPust $ 5,000.00 September $ 5,000.00 October $ 500.00 November $ 500.00 December _ $ 2,500.00 January $ 1,000.00 February $ 1,000.00 March $ 2,500.00 April $ 1,000.00 May $ 2,500.00 June $ 33,069.21 TOTAL $ 59,569.21 Scenario 2 Payment Proposal — Given the dollar amount ($73,231.88) and per our discussion associated with the penalties, I would ask that we extend the time period out for 2 additional months, which would include July and August of 2014. Deschutes County — Audit July $ 5,000.00 August $ 5,000.00 September $ 1,000.00 October $ 500.00 November $ 500.00 December $ 1,000.00 January $ 1,000.00 February $ 1,000.00 March $ 1,000.00 April $ 1,000.00 May $ 1,000.00 _ June $ 15,000.00 July $ 20,000.00 August $ 20,231.88 TOTAL $ 73,231.88 Thank you for your consideration and willingness to ask that the Board waive the penalties asst iated with the audit due to the past errors of the Auditing firm. Sincerely Scot -nee