Tax for Penalties, Interest
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Tax for Penalties, Interest |
Has Specific Limitations SC Online Publisher The Town of Fenwick Island is asking the Delaware Division of Revenue for a full abatement of penalties assessed by the the division for failure to pay or file withholding taxes for a period of nearly four years, according to the town's auditor. Thomas Sombar of Sombar & Associates said on Monday, March 3, 2003, that he was sending a certified letter to Bill Remington, director of the Division of Revenue, citing various reasons for dropping the penalties assessed by the division in its letter dated Feb. 7. Sombar said the town had 30 days from the date of that letter to respond, and that among the reasons it has cited for the abatement of the penalty is that it would be "unfair to punish the residents of the Town of Fenwick Island. They're not at fault, but they're the ones who will be forced to shoulder the cost of this." Sombar said the town will still have to pay interest on the unpaid taxes unless it could show that erroneous advice from the Division of Revenue caused it not to pay the taxes. "Obviously, we can't say it's their (division's) fault," Sombar said. Sombar said the town has the money to pay any penalties and interest assessed by the division even though it can't use funds from the 1.5 percent realty transfer tax as he and council members originally thought. At the Jan. 31 council meeting, in response to questions about how the town would pay penalties and interest from the state withholding taxes that weren't filed or paid from early 1998 through 2002, council member Peter Frederick said that any penalties and interest incurred would be paid from revenues from the town's real estate transfer tax. The town's auditor, Thomas Sombar, concurred with Frederick at the meeting that transfer tax revenue could be used to cover those penalties and interest. In the Jan. 31 meeting and in a later interview, Sombar said 1/2 percent of the transfer tax could be used for public safety and infrastructure expenditures and that the remaining 1 percent could be used in the general fund. Deputy State Auditor Ron Draper, however, said on Friday, Feb. 21, that was incorrect. "The law pretty specifically states what the usage of the total one and one-half percent can be for," said Draper. "It talks about public safety, economic development, capital projects and infrastructure." Specifically, Chapter 16 of the Delaware Code, which authorizes towns to charge a Municipal Realty Transfer Tax, states: "(c) Any funds realized by a municipality pursuant to this section shall be segregated from the municipality's general fund and the funds, and all interest thereon, shall be expended solely for the capital and operating costs of public safety services, economic development programs, public works services, capital projects and improvements, infrastructure projects and improvements and debt reduction. (71 Del. Laws, c. 349, § 15.)." On Monday, March 3, Sombar said the town would be able to pay any penalties and interest from the general fund and then move money from its transfer tax fund to cover public safety expenses for the police department. |
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