BY KRISTEN BUCKLES
The Greene County Clerk's Office is conducting what will now be an annual audit of local hotel and motel tax revenues after the county began to suspect earlier this year that not all funds that were owed have actually been submitted.
County Mayor Alan Broyles had announced this concern in April during a Budget & Finance Committee meeting, saying that some motels may be collecting the funds but withholding them from the county.
The 1986 Private Act of the Tennessee General Assembly created the local hotel/motel tax.
In a followup interview this April, county attorney Roger Woolsey explained that the private act calls for all local hotels and motels in the county to collect a 7 percent tax and forward the funds to the office of County Clerk David Thompson.
Woolsey said the Greene County Partnership, which receives much of the hotel/motel tax revenue from the county, was the entity that discovered some companies might not be filing any returns with the county at all.
"[Thompson] is providing me with a list of who's collecting and who's not collecting. Then we've got to try to identify those entities who are not filing those reports, not collecting and not paying, of course," Woolsey said at the time.
During Monday's meeting of the Greene County Commission, Commissioner John Waddle requested a report to the commission concerning the hotel/motel tax.
AUDIT BY THOMPSON
"We are in the process of doing a hotel/motel tax audit with all the motels in the county," Broyles said. "The funds come through David Thompson's office."
In fact, it is Thompson, Broyles said in a follow-up interview, who is conducting the audit.
Thompson's office receives the funds and forwards them to County Trustee Dan Walker, who then reports how much revenue the tax brought into the county, Broyles said.
The 1986 private act also references Tennessee Code Annotated Title 67, citing some general provisions relating to the collection of taxes.
However, under a different section of that same title, 67-4-1406, the state law requires that the collector -- in this case Thompson -- is to conduct an audit of "each operator in the municipality at least once per year and shall report on the audits made on a quarterly basis to the municipal legislative body."
"We've never done an audit before this," Thompson said in a telephone interview on Monday. "It's a new thing for us as well."
Thompson said he had originally assumed an audit would be conducted by an outside, private agency, but that his office has undertaken the task in the past several weeks as he cross-trains individuals to help him compare individual hotel or motel records with the amounts brought into the county.
"We're early in the process -- very early," the county clerk said. "It's not going to be a complicated process or a difficult thing to do. It's just a matter of managing it time-wise with the existing personnel.
"Once we've completed it, we'll do it annually."
NO MECHANISM IN PLACE
Woolsey said in April that the county has not previously had a mechanism in place to ensure that motels and hotels were making the payments.
He said the intake of hotel/motel receipts was handled by the county similarly to collection of county personal property tax, which relies on business owners' truthful reporting of their inventory.
"It's kind of an honor system," he said.
As Thompson conducts what could be the county's first audit of these collections, and at least the first since he took office in 2006, the county clerk said that he has so far not encountered any situations where he believes the facility deliberately withheld the tax.
"So far, what we've found is, we think that it's just been an oversight on the part of the hotel/motels to pay, not anything intentional," Thompson said on Monday. "I hope that is the way it is throughout."
The private act calls for the county to charge 8 percent interest on any delinquent taxes, in addition to a one percent penalty for each month the tax is delinquent.
Willful refusal to collect or remit the tax is to result in a $50 fine per individual transaction.