TOMPKINSVILLE — The Tompkinsville City Commission is investigating the collection of the city's occupational tax from businesses that may not actually be located within the city's limits.
The city commission discussed at its special-called meeting Thursday night the location of one such business and whether it should be paying the tax.
That business is Roy Anderson Lumber Co. along Columbia Avenue.
Bruce Johnson, controller for the company, addressed the city commission about the issue during its meeting.
“We take very seriously our responsibility to collect these taxes for the city from our employees, but at the same time we're responsible to the employees to make sure that anything we do collect on the city's behalf is returned to the city is in fact due,” he said.
Johnson preceded to tell city commissioners that there is a question of whether or not the bulk of the company's facility is within the city's limits.
“Everything we've been able to discover says we're not or at least the bulk of our facility is not (in the city's limits),” he said.
He shared with city commissioners maps showing the location of the company's property.
Johnson explained company officials were notified by former Mayor Windell Carter that the company had been annexed into the city's limits and that it occurred about the same time the Walmart property along North Main Street had been annexed.
“I guess we didn't know procedurally what would happen or that we should receive anything,” Johnson said. “We just assumed we had been annexed into the city. As we investigated what it takes to be annexed into the city, we discovered there are procedures that are required by the state for annexation of property and that there are even more stringent rules for annexation of industrial property. These rules, as best we can tell, were not followed at that point in time when it was thought we were annexed.”
Johnson referred to map that is on file with the Kentucky Secretary of State's office, the city of Tompkinsville and the Monroe County PVA's office and pointed out that the map shows the bulk of the company's facility to be outside the city limits.
“We do take very seriously our responsibility to collect these taxes and it is our hope or our desire to hear from the city: Are we wrong?” Johnson said.
City Attorney Richard Jackson said he thought Johnson was correct that the bulk of the property is not within the city's limits.
“Because of the procedures to to follow for annexation are not only very detailed and clear, even in the 1990s, they also provide full documentation, such as filing notices with the secretary of state (and) filing notices with the county clerk's office. As you are very well aware, … those are not there,” Jackson said. “I'm assuming it was the mid-'90s. That timeline would match with everything else.”
Johnson then said the city has been “put on notice.”
“As of Dec. 1 we will no longer be withholding this tax from the bulk of our employees,” he said.
The employees who work in the portions of the company that have been deemed to be within the city's limits will continue to have the occupational tax with held from their paychecks.
“But for the rest of the employees, as of Dec. 1, we intend to return what was with held for the third quarter and return everything that has been with held for the fourth quarter and no longer collect it,” Johnson said.
He then asked Jackson what the company could do about prior years when the tax was collected from its employees.
Jackson referenced state laws that address such issues and pointed out that one state law says the refund cannot be made unless each individual tax payer applies for it within two years from the date the payment is made.
The company's officials intend to research the matter further and Johnson said “... if this is recoverable, you're talking about several hundred thousand dollars.”
There was some discussion among audience members regarding whether or not the company should be receiving city services if the bulk of its facility is not within the city's limits, but no action was taken by the city commission regarding the suspension of the company's city services.
Mayor Scotty Turner said the city commission knows there is a discretion and that the city has four maps with each one showing different boundaries for the city's limits.
An ordinance dating to 1995 shows where the property was annexed.
Tonya Anderson, a member of an advisory council to the city commission, said she found a proposal on file with the county clerk's office but that it appears nothing was ever done with it.
City Clerk Sharon Walker said the proposal was approved by the city, but the paperwork was never filed.
Turner said the city commission is looking to resolve the issue and others like it.
“We've got another portion down at the golf course that we're looking at,” he said. “Reed Moore was the lawyer during that time. I can almost guarantee you that got filed. That's the next property we're looking at.”
The mayor also said he wants to be fair and that the city commission thought the lumber company was in the city's limits. He added that calls have put in to state officials and with other attorneys about the issue and that he is awaiting answers.