An Augusta accounting firm intends to launch an audit next month of Columbia County hotels not initially included in a previous audit.
Serotta, Maddocks, Evans & Co. partner Rick Evans told members of the county Audit Committee during a Tuesday meeting that “two or three” hotels were missed in an audit conducted this year and accountants intend to track down and look at those financial records.
The previous audit of responsive hotels led to the creation of a new form disseminated to area hotel and motel executives during the summer. Officials hope the form puts an end to taxes being paid improperly.
In that initial audit, accountants discovered that most of the county’s eight hotels improperly paid lodging taxes for four months of the 2009-10 fiscal year.
Hawthorne Suites, Motel 6 of Augusta, Howard Johnson, Best Western and Georgia Inn underpaid on taxes by a collective total of nearly $917 during the four months considered by auditors. America’s Best Suites and Econo Lodge overpaid by about $1,100.
Auditors and county finance officials believe the incorrect payments stemmed from confusion among hotel executives on what state entity received which payment and when lodging-tax exemptions kicked in for hotel guests.
Guests are charged a 5 percent lodging tax for the county and a 7 percent sales tax for the state. Evans said he believes many managers confused the destination of those payments. In other instances, Evans believes some hotels wrongly believed that guests earned tax exemptions for stays of longer than 10 continuous days, when those exemptions don’t start until after a 30-day stay.
To alleviate the confusion, county Financial Services Director Leanne Reece sent those hotels a new payment form that includes step-by-step instructions on how to calculate the taxes owed.
“We hopefully have made this much, much clearer,” Reece said of the new form. “We put at the very top that there is a 5 percent excise tax on rooms, lodgings and accommodations, so they can’t confuse it with the 7 percent sales tax.”
Initial consideration, though, to recover lost funds from underpaying hotels has been abandoned, Reece said.
“I think we’re going to let that go for now and just try to fix the system,” she said.
Reece said she’d like to initiate another audit at some point to check on the success of the new form.
In the meantime, Evans said, his firm will conduct spot checks of the hotels upon request.
“If (county officials) feel like a particular operator wasn’t reporting timely or properly, the county has the right to go in and audit at any time,” he said.