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Our View: No need to add extra tax burdens for Havasu businesses

March 6, 2019

An 800 percent return on your investment sounds like a no-brainer. Nobody can blame Lake Havasu City Council members for wanting to spend $16,000 to collect up to $130,000 in revenues for the city. However, the council’s decision to hire an auditing firm to bulldog Havasu businesses on proper tax filing was probably mostly unnecessary. The city says Gilbert –based Albert Holler & Associates will be tasked with ensuring Havsau businesses are filing tax returns in an accurately and timely manner.

City officials believe the firm could help Havasu earn back up to $130,000 in uncollected revenues — and maybe more. There seemed to be little concern about the extra burden placed on Havasu businesses to comply with requests from the firm – and it is a burden, despite what the city may say.

Business owners will be asked to show documentation to back up their tax returns. In many cases, it’ll be information that the businesses are keeping for their records anyway. But lost productivity time, no matter how small, still has potential to mean lost revenue for Havasu businesses, many of which are small operations. (To that end, it’s interesting that the council voted unanimously for the firm with little discussion, since several council members are small business owners or managers themselves.)

In any case, it’s not like things are tight in Havasu. Until voters passed Prop. 409 last year, the city had more money banked than it was legally allowed to spend.

And the community is enjoying an economic boom period, with the city collecting some of its biggest tax gains in 10 years. (In December, the city collected more than $12 million in total sales taxes, compared to $10.7 million the previous December and marking the city’s best year since 2009.)

Admittedly, it’s probably true that there are some bad actors in our community who do need some persuasion to file taxes correctly.

The good news is the State of Arizona already has a process to handle these situations.

As tempting as it might be for the city to squeeze out every dime it’s owed, there’s probably no harm in saving business owners the headaches and leaving some cash on the table.

— Today’s News-Herald

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