AUSTIN (KXAN) — An Austin City Council member said Monday the city wants assurances from Capital Metro that the transportation agency will pay back hundreds of thousands of dollars in incorrect taxes it supposedly received from utility customers over the past several years.
Addressing Austin Energy General Manager Jackie Sargent, City Councilmember Leslie Pool said the city wants to know it will be repaid by Cap Metro, before refunds begin for customers in southern Williamson County where the inappropriate one percent “metro” sales tax was levied. A KXAN investigation initially revealed the issue to Austin Energy.
“I just would really like to drive home the point that we would like to receive reimbursement for what we are going to be paying out,” Pool said at an Austin Energy Utility Oversight Committee meeting Sept. 19. “We did not keep the money in the first place, and it is a hard lift.”
Pool said she was hoping for any type of agreement, be it verbal or written, that indicates Cap Metro will step up and repay. Austin Energy admitted in a Sept. 8 memo it had collected roughly $600,000 over the past four years in taxes from more than 6,000 customers in Forest North and surrounding neighborhoods, which are located east of the intersection of Anderson Mill Road and Hwy. 183. The energy utility said it remitted the taxes to the Texas Comptroller, which sent the money to Cap Metro. The utility said it will strike the tax from the customers’ bills.
The utility initially said the statute of limitations caps refunds for this type of incorrect tax at four years. KXAN has heard from customers saying the tax existed for more than 10 years. It is possible, if Cap Metro received the tax monies, that the transportation agency received well over $600,000, according to records reviewed by KXAN.
“Refunds may be limited to the last four years, but we are continuing to investigate that matter,” said Sargent.
Cap Metro spokesperson Mariette Hummel said the transportation agency isn’t sure it ever received the tax money in question.
“At this point, we don’t know if we received the money,” Hummel said. “Capital Metro doesn’t collect or assess taxes. Taxes are collected and remitted to the Comptroller, and we receive a lump sum each month.”
Sargent did not say the utility has made any agreements with Cap Metro on reimbursement. She said the utility is conducting an internal investigation and hiring an outside auditor to review all of its tax collection practices.
“We are doing everything in our power to make sure that we get those funds refunded,” Sargent said.
City Council Member Don Zimmerman, who also sits on the utility oversight committee, said there’s an “ethical issue” at hand. He hinted the utility should consider looking beyond the four-year statute of limitations to pay back every dollar customers paid inappropriately.
“The statute could say, here is what you have to pay, but, if a certain amount of money has been collected in years prior, would there be a way to look into what the total amount of money is?” Zimmerman asked.
Zimmerman also said he appreciated the utility being forthright about mistakenly collecting the tax and acting quickly.
“I had to sue the city of Austin for a case of taxes being illegally collected, and it took seven years to resolve it,” Zimmerman said.