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Boone To Collect Its Own Taxes? Upcoming Contract With Watauga Increases To $119,000 Due To Switch

By Jesse Wood

May 31, 2013. After Council Member Jamie Leigh initiated the discussion at Friday’s Town of Boone budget retreat, Council Member Lynne Mason directed staff to “prepare a more detailed report” into costs associated with the Town of Boone collecting its own property taxes in the future. 

The town manager and the Boone Town Council discuss the upcoming budget on Friday. Photo by Jesse Wood
The town manager and the Boone Town Council discuss the upcoming budget on Friday. Photo by Jesse Wood

In fiscal year 2011-12, the Town of Boone paid Watauga County $103,000 to collect its taxes, and fiscal year 2012-13 expenses for tax collections are estimated to come in at just under $100,000 at the end of the current fiscal year.

For the upcoming year, collection costs will increase due the redistribution change of the sales tax to an ad valorem basis. That switch spearheaded by the Watauga County Board of Commissioners led to a loss of $1.8-million in upcoming annual revenues for Town of Boone.

The Town of Boone’s cost for tax collections done by the county is budgeted at more than $119,000 for the 2013-14 fiscal year.  

“I would like to look at this one further. Our rate went up to $119,000 that we are going to pay the county because they changed our sales tax allocation and took our money away and we are paying more,” Leigh said, adding earlier a question if those collections could be done in house. 

Town Manager Greg Young said that it is “still not cost effective,” especially if Watauga County continues collecting at a 98-percent rate as it has in the past. 

Young mentioned that “most” municipalities contract with their respective counties for tax collection services, and Young warned the council that costs entail more than just adding one or two personnel members. 

Boone Finance Director Amy Davis noted that her department has had the same number of employees for the past 12 years and “couldn’t consume” tax collections with the current staff.

After several minutes of discussion, Leigh asked if any of the other council members wanted to delve into this issue further, and all of them said, “Yes.” (Council Member Rennie Brantz was absent.)

Mason then directed Young and his staff to further look into the matter of in house tax collections.