Video: State Mistake Means One City Will Have To Pay Back Sales Tax Revenues

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SALTILLO, MISS. (WCBI) – Earlier this month, the Saltillo City Clerk double checked some businesses the Mississippi Department of Revenue had on the town’s tax rolls.

“There were some with Saltillo addresses but they were actually not in the city limits that were being diverted to us,” said Saltillo Mayor Rex Smith.

It is the main reason the city’s sales tax revenue figures were so high. For example, in March, the state department of revenue diverted $255,768  in sales tax revenue to Saltillo. That compapares to $71,472 in March of 2015.

Much of that money should have gone to Tupelo. Now, Saltillo Mayor Rex Smith says the city will have to tighten its belt, and repay $120,000 over a 17 month period.

“Our aldermen are very careful with our money and we had been putting some back in reserves, that will slow, hopefully, it won’t impact us where we have to get into reserves,” Mayor Smith said.

Cities like Saltillo count on property taxes and sales tax revenues to make their yearly budgets, so if the sales tax numbers are off or incorrect, it can cause some problems.

“It’s hard to make a budget when you have something like that, but it’s something you have to be aware of,” he said.

And that’s the advice Mayor Smith gives to other cities and towns. Check those sales tax rolls from time to time. It could save the city from an unexpected budget nightmare.

Mayor Smith points out that some Saltillo businesses were not listed on the city’s tax rolls, but that has been corrected by state officials.