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El Paso County Recoups $1.3M From State

COLORADO SPRINGS, Colo. (AP) - Colorado has shortchanged El Paso County in the amount of sales tax revenue collected by the state but not sent back to the county.

The Gazette reports that the county has recouped $1.3 million in missing sales tax revenue from the state and may be due an additional $830,000.

The discrepancy follows a years-long investigation into the money that's collected by Colorado and remitted back to the county monthly. County officials couldn't prove the state was off on a 1 percent sales tax passed in 1988 until another 1 percent tax was passed in 2004.

Such discrepancies may not be unique to El Paso County. Douglas County officials say the state's been off about $200,000 a year since a 1 percent capital improvement tax was passed there in 1996.

By law, the state collects sales taxes and pays them to the county.

El Paso County budget office Nicola Sapp said the 1 percent 2004 local sales tax for road construction and maintenance gave them comparative data to make their case on what they suspected was a shortfall on the 1988 sales and use tax on automobiles and building materials.

The county conducted an analysis and in 2007 informed the state that some vendors hadn't paid the proper amount of taxes. County officials also discovered the numbers were off.

"The variances between what we were getting and what Pikes Peak Rural Transportation Authority was getting didn't pass the common-sense test," Sapp said. "We didn't know the source. But the further we dug, the bigger the discrepancies got."

Colorado officials sent letters to the county's 14,000 vendors, advising them of potential reporting errors.

Part-time employees researched the discrepancy and found errors in which collections were posted to other entities, vendors provided wrong information and data was incorrectly keyed in.

That resulted in the $1.3 million going back to the county from the state. Twenty-seven additional audits totaling $830,000 are pending with the state.

"We're happy to hear it's working out well for the county. We think this is a good partnership for everyone," said Mark Couch, spokesman for the Colorado Department of Revnue. The state has upgraded its computer system and has converted paper files and manual data entry to a new electronic system, Couch said.

Sapp said online filing of sales tax collections and software is designed to flag errors.

Douglas County also has an employee that checks state records for anomalies, resulting in thousands recovered for the state each year.

"We got real proactive and, with the help of on-staff sales tax specialists and proprietary software that we developed in-house, have recognized discrepancies," she said.

Holmes said the discrepancies involve taxes collected on a 1 percent county sales tax for roads and bridges, a justice center and open space.

(Copyright 2011 by The Associated Press.  All Rights Reserved.)

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