WILLIAMSON COUNTY, Texas (KXAN) — It appears Austin Energy may have incorrectly taxed some Williamson County residents for more than a decade, according to records obtained by KXAN.
Austin Energy admitted Sept. 8 it inappropriately levied a 1 percent sales tax on roughly 6,000 residents in and around the Forest North neighborhood, which is an unincorporated area in southern Williamson County, according to a utility memo. The tax was collected for Capital Metro, the utility said.
The utility said it would refund customer accounts, but it would only give back taxes collected in the past four years, which is the statute of limitations.
Spokesman Robert Cullick did not confirm when the erroneous tax started, but he did say the tax has been levied in southern Williamson County “for some time, even before 2012.”
KXAN found a Forest North resident with Austin Energy bills showing a one percent sales tax dating back to 2004, meaning the incorrect tax may have been in place for up to 12 years in some homes. The utility has not confirmed how long the tax was incorrectly applied and to which specific homes, yet. Cullick said the utility would not comment on specific customer accounts.
In a review of state and local tax codes, KXAN found no tax code or authority for Austin Energy to apply a sales tax to residential electricity sales outside city limits in southern Williamson County.
KXAN spoke with multiple residents in the area, who say they are looking forward to their refund, and they would like all their money back.
Forest North resident Bill Tucker said he has lived in the neighborhood for 30 years. The refund will certainly be welcome, he said.
“It’s not a lot of money, but over the years it did add up, and it was incorrect,” Tucker said.
“It’s not a lot of money, but over the years it did add up, and it was incorrect,” Tucker said. “Everyone would like to get some money back, but at this point in time I’ve spent the money. Anything I can get back is gravy.”
Tucker said, prior to finding out his bill was wrong, he trusted the utility to apply taxes correctly.
“I figured someone was smart enough to know if we were supposed to pay it,” he said.
The utility has apologized for the inappropriate tax, and it is working to correct the issue, Cullick said.
The utility launched in internal investigation; it will hire an auditor, and it is in the process of working to refund customers for the incorrect tax.
For the past four years, the utility estimates all the refund credits would amount to roughly $600,000, according to a memo from Austin Energy General Manager Jackie Sargent. Judging by that total, the utility could have collected well over $1 million in erroneous taxes, depending on how many customers paid it and how long they paid it.
The utility collects taxes for multiple taxing authorities. In this case, it collected the tax for Capital Metro. After collecting the tax monies, the utility remitted them to the Texas Comptroller, which distributed the proceeds to Cap Metro.
Cullick said Austin Energy would pay the refunds itself in the meantime, and it would later work with Cap Metro to recoup the money.