SOUTHINGTON — Local businesses will not be audited this year, and instead town officials will work on an educational campaign to improve private property reporting.
However, the town’s tax assessor may request an audit or similar action next year.
Business owners are required to list equipment, machinery, and other items associated with their companies, but nearly 500 people refuse to do so or own them, according to town assessor Teresa Babon. You have not identified the property you own. So she has to make her best guess as to the value of her taxable property.
Businesses are taxed on real estate and automobiles, in addition to smaller items such as computers, office supplies and furniture.
Hiring an outside firm to audit local businesses could have generated about $2 million in new tax revenue, according to the firm conceived for the job.
However, town council leaders were hesitant about auditing local businesses at a time when many were struggling to survive.
Council President Victoria Triano was pleased with the plan Bavon presented Monday, which included a letter and briefing on what business owners must declare on their private property. I was. She hoped that once the business owner knew how, he would declare his private property correctly.
“We believe that those who don’t know need to know because we want to do the right thing,” says Triano. “I think this is going to be great.”
The plan to audit businesses included only those businesses estimated to have claimed or owned personal property valued at $50,000 or more.
Democratic Rep. Val DePaolo said the audit burden was not evenly distributed.
“Is it really fair to go after all these medium and large companies? It’s really not fair,” she said. “These are very tough times for businesses.”
Sending letters and information is also likely to increase tax revenue, according to town council Republican deputy chairman Paul Chappinski. This method avoids paying audit firms and keeps all excess tax revenue in the town.
Babon said she “reserves the right” to call for a townwide audit if this year’s education efforts show poor results.
“I’ll come back[next year]and talk about how personal property filings have improved. Hopefully we’ll see an increase, an improvement,” she said. I would like the opportunity to discuss further how we can improve.”
At the last conference, Babon outlined the efforts she’s already made to get companies to submit the necessary paperwork. For companies that do not file a personal property declaration, Babon will infer the value of the personal property and add a 25% penalty.
“These people haven’t filed yet because it’s cheaper not to file,” she said.