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Others shorted sales tax?
Priceville, Eva, Somerville and fire departments are designated recipients, as well as Morgan school board

By Sheryl Marsh
smarsh@decaturdaily.com · 340-2437

In addition to the Morgan County Board of Education, recipients of the casual sales tax include volunteer fire departments and the towns of Priceville, Eva and Somerville.

The County Commission office allegedly owes the school system $656,000, and part of it could belong to fire departments and the towns.

Morgan Sales Tax Director Ed Sims said the casual sales tax that the license commissioner started collecting in 1989 is divided among the five entities and the County Commission.

For 18 years, the commission office kept all the money.

After Deputy License Commissioner Patsy Dougherty questioned distribution of the tax collections last year, she re-routed the funds for education.

Dougherty said she sends the casual sales tax proceeds to Sims' office.

Sims said he started disbursing the money to the school system, fire departments and townships in October 2006.

What is casual tax?

Residents pay casual tax on any vehicle they register in the license office that they purchase from an individual or a company that's not a licensed dealership in the state.

The tax is also attached to mobile home purchases.

Before any of the entities get their share, Sims said, the first 10 percent goes to the county's general fund. Then 10 percent goes to the volunteer fire departments. Next, the township of residency of the purchaser who registers the vehicle gets its share. Then, the remainder goes to the school system.

It's been determined that the county owes the school system $656,000, according to administrator Syble Atkins.

Rodger Spillers, chief financial officer for the school system, said he couldn't tell a difference in the monthly appropriations from the county.

"We haven't received any payment with a notation showing that it was from casual sales tax," said Spillers. "When we receive the money from the County Commission office, there's usually a notation that it's from 1 percent or 2 percent sales taxes."

Sims said he combines the casual tax appropriation with the 2 percent tax allotment. He said the casual tax amount is not a significant amount.

"It's a very small amount based on the rest from the 2 percent tax," Sims said. "It would probably be a decimal point percentage."

Allotments

Records from the license commissioner's office show that monthly allotments from the casual tax ranged from $2,418 to $6,996. From Oct. 1, 2006, to June 30 the license office forwarded $42,194.90 from casual tax collections to Sims' office.

Prior to this week, school officials did not know that the county owed money to the school system.

They want the commission office to pay.

"There's no way we could have known that we were not getting the money," said Spillers. "We still don't know exactly how much they owe. Right now, in the situation we're in trying to acquire a month of operating expenses, we need the money. If it was put on the books for the schools, I feel like it should have been passed to the schools."

County Commission Chairman John Glasscock has been conferring with County Attorney Bill Shinn about the issue.

Glasscock said last week that the commission should retain $656,000 in the Road and Bridge Fund for the liability.

Shinn, who said he could not find a legal basis for the casual tax, continues to research the matter.

During a recent audit of the license commissioner's office, state examiners found that the commission had neglected to disburse the casual tax proceeds to the county schools for 18 years.

Instead officials put the money in the general fund and used it.

Allotments

The Morgan County Sales Tax office disburses allotments from casual and 2 percent sales taxes to the Board of Education, volunteer fire departments and towns of Eva, Somerville and Priceville.

From October 2006 to May 2007, the office disbursed these amounts:

  • County schools, $1,902,932.96.

  • Volunteer fire departments, $211,437.

  • Priceville, $290,721.

  • Somerville, $73,853.82.

  • Eva, $132,467.60.

    Note: County schools also received $3,470,666.36 from the county’s 1-percent sales tax.

    - Morgan County license commissioner and sales tax offices

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