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Voucher reimbursement, tax-exempt status are hot topics at Marilla work session

A generally mundane task at the end of monthly Marilla Town Board meetings stirred spirited debate at Tuesday’s work session.

Among the bills paid by the council near the meeting’s conclusion are vouchers submitted by town employees for purchases they make on behalf of the town.

As a municipality, the town is exempt from paying sales tax. However, town council members noticed that they’re reimbursing purchases in which a tax was paid, and at a recent meeting chose not to pay the tax on a voucher.

The ensuing debate wasn’t “all about the Benjamins,” but rather the Washingtons and Lincolns.

Supervisor Earl Gingerich Jr. said he is constantly handed reimbursement vouchers for purchases on which the tax was paid, and he suggested setting a standard on compensation, explaining that many of the purchases include a sales tax that amounts to $1 or less.

“I can’t expect everybody to run around with the town’s tax-exempt number for a few-dollar item,” said Gingerich, who added that some outlets may not be inclined to deal with the extra work involved with tax exemptions.

According to Gingerich, one person alone has submitted more than a dozen vouchers since 2014 totaling less than $30 in sales tax.

The Council countered that perhaps education is a better answer. Councilwoman Deborah Beats noted that board members weren’t aware until recently that the sales tax shouldn’t be paid.

“If we find out that something we’re doing is wrong, moving forward, shouldn’t we do it correctly?” asked Councilwoman Julie Lathrop. “Are we not supposed to submit because it’s just a few dollars?”

Councilman Randy Reichert agreed that education is a better solution, but cautioned that it may take some time for the message to sink in.

The voucher that wasn’t paid dealt with a purchase by a person who was unaware of the town tax status.

“I clarified it to him because the poor man was very uncomfortable with this,” said Beats, adding that after the explanation “he had no problem and understood the situation.”

Awareness of the tax status isn’t the only issue; there’s also ensuring that a purchase is made at the correct location. For example, the town has its tax-exempt status on file at a nearby supermarket, but an employee might perform town business at another store.

Councilman Brian Nolan suggested the town simply pay the bill, minus the sales tax. Town attorney Joel Kurtzhalts said the council could do that, but he warned that the council must be specific with its decision on paying bills.

“Depending on how you address the voucher that’s presented, if you reject it, it can never be paid,” Kurtzhalts said. “You might want to table it for further information ... so the individual can be paid. That way you can educate and maybe alleviate it in the future.”

Gingerich said the vouchers weren’t addressed when the state comptroller’s office audited the town.

No formal action was taken.