Salt Lake County perplexed by drop in sales tax revenues

Salt Lake County's sales tax collections fell more than they should have in recent months.

The county's financial brain trust isn't positive what's to blame for an abrupt and inconsistent downturn in revenues from the county's 1 percent local-option sales tax. But finance officer Lance Brown offered one theory Tuesday to the Salt Lake County Council.

It looks, he said, as though the state Tax Commission reduced the county's allocation, possibly to make up for overpayments in previous years.

But if the Tax Commission did that, Brown said, county financial officials were never notified. He wants to meet with Tax Commission staff to see if that's the case.

"It doesn't make me happy that they'll withhold money without talking to us," said Council Chairman Michael Jensen after hearing Brown's hypothesis.

Jensen was one of several council members who wondered whether they should press the Tax Commission for an answer. But the council backed off at Brown's request to allow him and a colleague to get to the heart of the matter with their number-crunching state counterparts.

In any event, the shortfalls Brown cited were noteworthy.

While all other forms of sales taxes went up in 2013 — 2.8 percent collectively, with 6 percent gains for both hotel-room rentals and restaurant bills — the county's share of local-option tax revenues declined 2.4 percent from 2012. That amounted to $531,271, Brown said.

The trend worsened in January, he added. Local-option collections were down 11.7 percent, or $208,000, from the same month a year earlier. That deficit nearly offset growth in all other sales-tax categories combined.

Brown said this kind of thing has happened before. In 2008, he said, the Tax Commission routed a disproportionate amount of sales taxes paid by telecommunications companies to unincorporated county accounts. Later, the overpayments were taken back and re-allocated to the appropriate cities.

"We think there was a recurrence of that," Brown said, but he won't know for sure until conferring with state officials. "There may be a perfectly logical explanation. … Obviously, we want to stay in constant communication with them since it affects our budget."

State Tax Commission spokesman Charlie Roberts said his office had just learned of the county's concerns and was checking into the matter. "We'll continue to work with them on it," he said.

mikeg@sltrib.com

Twitter: @sltribmikeg