State Says City Must Issue Large Tax Refund

The State of Ohio has informed the City of Marion that they must make a large income tax refund to an unnamed utility company. Deputy Auditor Cathy Chaffin Tuesday evening told the Finance Committee of Marion City Council that the City has been told to refund $298,422.

Chaffin, who also serves as the City’s Tax Commissioner, told committee members that the refund represents an overpayment in 2009.

The company’s identity is not being released because of the confidentiality of income taxes, but they were described as being a utility company because of the nature of the tax. Income taxes for utility companies are collected directly by the State of Ohio and they remitted to the City of Marion.

The company in question has filed an appeal saying they believe they overpaid income taxes in 2009. Even though the appeal has not been heard by the State, Chaffin said the law states that the City must pay the estimated refund within 90 days or they face additional interest and penalties.

Chaffin said she’s not currently aware of other municipalities that are experience the same possible refund as Marion.

Marion Mayor Scott Schertzer said the administration has not been able to get many of their questions answered. He said it may not be a lack of cooperation from the State, but may simply be they are just not asking the correct questions.

Schertzer said the amount of tax revenues the City receives from the utility fund varies wildly every year, which makes it difficult to anticipate if there has been an over payment. He said they have tried to work with the State to get a handle on the reason for the changes, but have been unable to get direct answers to the problem.

Chaffin said it is difficult to investigate the issue because the City of Marion never sees the actual income tax returns filed with the State of Ohio.

There was no action taken by the Finance Committee Tuesday as the administration continues to gather information on options. The committee is expected to discuss the issue again at their next meeting in two weeks.