Four years ago, the City of Lincoln audited its telecommunications tax — and ended up collecting more than $3 million in unpaid taxes.
Now Bellevue wants in on the action, and other cities could follow.
The Bellevue City Council voted unanimously Monday to pursue a contract to audit its telecommunications tax. An audit would cost about $35,000.
Sponsor Carol Blood said she expects an audit to find hundreds of thousands of dollars — or even more than a million — in unpaid taxes.
“I'm just really excited about the potential that this has for our budget,” she said.
The telecommunications companies and cities differ on what categories of items should be taxed, Blood said. The question is whether the tax applies to things like car chargers and phone cases, which weren't around when the tax law was written.
Blood said that along with an audit, she'd like to see the city update the language of its ordinance about the telecommunications occupation tax.
“It's an antiquated definition that's currently on our books,” Blood said.
Two companies, Verizon and Windstream, paid Lincoln about $3 million altogether because of the audit. On top of that, the city has sued Sprint PCS over the tax and is in the process of conducting audits on other companies.
Other cities have considered making a similar move.
Grand Island Finance Director Jaye Monter said that city would be watching to see how the audit works out for Bellevue.
“That'd be something we'd definitely be interested in doing, but we haven't put the steps in place,” she said.
Norfolk has been in touch with the company that did Lincoln's audit, Finance Director Randy Gates said. He said he's not sure whether the city will do an audit, though.
“There's a number of things to look at,” Gates said.
Ralston Police Chief Rob Murtaugh said the city is aware of Lincoln's audit, but he'd want to make sure the city would receive a good return on the investment of an audit.
“We'll probably look into it a little further,” Murtaugh said.
Bellevue City Council President Don Preister said the audit could be a good way to bring in money without raising taxes. The council will likely vote on whether to approve the contract at its April 8 meeting.
“This could be a big help to the City of Bellevue,” said.
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