AUSTIN (KXAN) – A KXAN investigation has prompted Austin Energy to review, and likely refund, a 1 percent metro sales tax levied on thousands of residential customers in Williamson County, according to a memo sent Thursday to the Austin mayor and City Council.
Austin Energy levied the tax on roughly 6,000 residential customers in a portion of Williamson County outside the Austin city limits. A spokesman said the utility’s customer service office applied the tax incorrectly.
“We’ve been collecting a metro sales tax we shouldn’t have been collecting,” said Austin Energy spokesman Robert Cullick. Cullick said that in the past four years the utility may have collected over $300,000 in taxes that will need to be refunded.
Cullick said the public utility stopped levying the tax on Sept. 8, in the southern portion of Williamson County. Now, Austin Energy is working with the Texas Comptroller to find customers that will be eligible for a refund. The refund would apply to residential customers, not commercial customers. He said the utility will have to find former customers to issue a refund by check. It appears the taxes were sent to CapMetro, according to the memo.
KXAN spoke with Rep. Tony Dale, R-Cedar Park, who said he would be making sure the taxes are accounted for and refunded. Dale’s district includes the area where the customers were incorrectly taxed.
“We are going to continue to monitor this … and make sure everyone who is due a refund receives a refund,” Dale said.
Austin Energy is now conducting an “extensive review” of its tax collection practices for external taxing entities. The review will include hiring an outside firm to conduct an external audit, according to the memo.
A series of KXAN requests, submitted under the Texas Public Information Act, as well as numerous phone and email inquiries about the metro sales tax spurred the utility to investigate and reverse the tax in a part of Williamson County.
KXAN reviewed state and local tax codes and found no taxing authority that allowed Austin Energy to apply the sales tax to residential electricity customers in the unincorporated area of South Williamson County.
You can research your own local sales tax codes here.
It is not clear if there are other pockets of Williamson or Travis counties that have been taxed incorrectly.
Austin Energy collects sales taxes for many taxing entities, including CapMetro. The utility sends the tax monies to the Comptroller, which then distributes them back to the proper taxing entities. The errant taxes appear to have been delivered to CapMetro.
“Austin Energy will provide the appropriate refunds and then seek reimbursement from CapMetro through the State Comptroller,” the memo states.
Austin Energy is communicating with the Austin Law Department and Comptroller’s office to determine which customers will need a refund.