It’s been little more than a week since Milwaukee’s new sales tax went into effect and things aren’t going as planned for residents in the county’s suburbs.
At Monday's Intergovernmental Cooperation Council meeting, nineteen Milwaukee County mayors and village presidents looked to state leaders to find out why many of their constituents are paying for a sales tax they didn’t agree too.
“Just on Netflix alone we’ve got hundreds of people in the suburbs posting on social media that they’re paying the Milwaukee tax, even though they are living in places like Bayside, Whitefish Bay, Glendale, Wauwatosa,” Glendale Mayor Bryan Kennedy said.
Kennedy notified the state’s Department of Revenue of the discrepancy on Friday.
Revenue Deputy Secretary Maria Guerra Lapacek said they’ve been trying to get the issue sorted since.
“There’s always is a little bumpiness whenever there’s a new sales tax,” Guerra Lapacek said. “This is the very first municipal level sales tax the state has done so a couple bumps were expected."
The city of Milwaukee’s sales tax is 2 percent while the rest of the County’s is 0.9 percent.
According to Kennedy the issue seems to affect residents and businesses in zip codes shared with the City of Milwaukee. Of the city’s 38 zip codes 18 overlap with other municipalities in the county.
Guerra Lapacek said the state’s database for merchants uses both zip codes and property tax records so the tools are there to for them to get it right.
She also said the Department of Revenue has been communicating with merchants since August about the new sales tax and how to proceed.
Still for many in Milwaukee’s suburbs it’s clear they haven’t completely gotten the memo.
“So now what do we do? So we’ve been calling every merchant that we have found,” Kennedy said. “We’re hoping to be able to iron those out and make sure people are able to say something if they are getting the incorrect tax applied.”
Guerra Lapacek also said refunds are available to residents incorrectly taxed but Kennedy believes it’s not that simple.
“For many cases we’re talking about people who maybe paid 20 or 30 cents or maybe and extra dollar,” he said. “I think most people are not going to do that.”
He believes any money leftover should be utilized by the municipalities that were affected by the error, money that typically would go to the state.
“The money that was collected illegally at suburban residences at suburban business and so it should not be given to the city of Milwaukee,” he said.
Others at the meeting said the funds should be used to educate those in the suburbs about how to be on the lookout for incorrect charges.
If merchants like Netflix or local businesses fail to get the numbers right come audit time they will be penalized.
“Do you really want to bump up against the Department of Revenue?” Guerra Lapacek said “We’re hoping that people, really get that message, make the system changes that are needed and do it correctly and hopefully that will spare us some issues.”
County and state leaders said Monday they will work together to create guidance resources for those impacted on how to address the problem.
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