January 9, 2008

Weitzman Seeks State Approval To Reinstate Sales Tax Audits

Computer matches, inspection of retailers could help raise County sales tax receipts

Nassau County Comptroller Howard Weitzman announced today that he is seeking approval from the New York State Department of Taxation and Finance to reinstate the County’s ability to audit merchants’ sales tax receipts to ensure the County collects its share. Previously, the County had an agreement with the state allowing field inspections of retailers and access to state sales tax data, but that program was cut in 2002.

“As Nassau County tries to adjust to a projected shortfall in sales tax growth this year, providing additional oversight of sales tax revenues is a logical step,” said Weitzman. “By allowing the county to run computer matches of state tax records with County business records and conduct filed inspections, we could add $1.5-$2 million to County coffers a year.”

 The County receives 4.25% of the state sales tax charged to consumers, the state gets 4% and the Metropolitan Transportation Authority receives .375%. Last year some $25 billion in taxable sales and services took place in Nassau County, translating into about $1 billion in sales tax revenue for Nassau. Sales tax revenue accounts for about 40% of the County’s $2.8 billion budget.

Previously, the County received about $300,000 a year through a state sales tax compliance grant program. Should the state restore the county’s ability to audit sales tax receipts, the Comptroller’s office would utilize field auditors already on the payroll, at no additional cost to the County.

“Taxpayers are already paying the sales tax,” said Weitzman. “I just want to make sure the money is properly remitted to the state so that we can get our share. This will help keep property taxes down in Nassau County.”

Auditors will use a variety of methods to review sales tax receipts, including visits to businesses that report unusually low receipts to observe customer traffic and inspecting businesses to see if they have their sales tax I.D. numbers posted.