Tax change takes Orem businesses by surprise

Published: Monday, April 3, 2006 10:58 p.m. MDT
 |  E-MAIL | PRINT | FONT + - 
OREM — Orem businesses are scrambling to adjust cash registers after a sales-tax increase of 1/10 of 1 percent went into effect on Saturday without a word from city officials to warn them about the change.

"How are we supposed to know?" asked Susan Christensen, credits manager for Good Earth Natural Foods, 500 S. State, after being contacted Monday by the Deseret Morning News. "We have to get on this but, in the meantime, (Orem) is costing the stores a lot of money. We would have preferred to be notified at least a few weeks in advance."

Orem officials said the confusion over the tax implementation for the voter-approved Cultural Arts Recreation Enrichment (CARE) tax was a matter of miscommunication and assumptions — and is something they seriously regret.

"We're going to be sending a letter out to all of our businesses about what's going on," said Jeffery Pedersen, Orem city finance director. "We never found out it was our responsibility to do anything other than notify the state. But we certainly owe an apology and will be sending a letter to (businesses)."

The CARE tax takes a small percentage of every dollar spent at Orem businesses to support cultural-arts and recreation programs in the city.

Story continues below

Pedersen said the city was under the impression that the state was responsible for notifying the businesses because the state handles the tax-related paperwork, collects the tax funds and then allocates the funds back to Orem.

The city notified the State Tax Commission more than 120 days ago that the tax would start April 1. Pedersen said they assumed the state would use those 120 days to take care of logistical matters — such as informing businesses about the new tax rate.

"We certainly made some very bad assumptions," he said. "We really do regret the position we've just placed our businesses in. We dropped the ball there."

The law requires the 120-day notification period to allow businesses time to change their systems, said Charlie Roberts, spokesman for the State Tax Commission. However, the state agency does not contact each business individually. Roberts also said that many businesses followed the issue during the election and were aware of the changes.

"Because it is a sales-tax issue people are watching it," Roberts said, referencing the debate about tax before the election. "There's no surprises — it isn't something done in a late-night city council meeting."

Trevor Odom, an operations manager for Best Buy, 309 E. University Parkway, said he noticed the change on the cash register as he rang people up on Monday. The responsibility of managing sales-tax numbers rests in Minneapolis with the corporate headquarters — not in Orem, he said.

Comments

You can be the first to comment on this story.

previousnext

Latest comments

As a HUGE BYU fan and alum I want to know everything that happens with the...

Having been to meetings involving Envision Utah, they get as much public...

Bowls all about money

Ralph, what you're suggesting is a form of socialism. We can't have any of...

Banks take heat for refusing California IOUs

What guarantee is there that the note would be good on the redemption date?...

Good job Keith. You are right. Pretty soon we will have no freedom. People...

Unholy alliance

Gee what a surprise. Utah leaders are just as corrupt as any other state.

which means if they get him they don't need and probably never wanted (no...

Someone should just put together a national college footbal tournament....

Activists hang sign on Mount Rushmore

Say what you like about their tactics, the Greenpeace is right - a new...

A despicable method

The difference is the cause. Would you want to live under the Taliban? They...

Advertisements