Cass County fights to avoid paying sales tax owed to LS

County filed second lawsuit to be heard this month

rpulley@lsjournal.comAugust 14, 2014 

Lee’s Summit is again waiting for a judge’s ruling to learn whether it will get close to $1 million in taxes owed to the city but mistakenly paid to Cass County.

A judge earlier this year dismissed Cass County’s attempt to stop the Missouri Department of Revenue from withholding tax receipts from the county, in order to pay the franchise taxes due Lee’s Summit from Kansas City Power & Light.

In June, the revenue department told the county it would be paying up. Cass County’s response was to file a second lawsuit.

The issue could be decided Aug. 29, when a Cole County judge has scheduled a hearing on the second suit.

“Every time I think we’ve got closure, something else happens,” said Lee’s Summit Mayor Randy Rhoads.

Cass County Presiding Commissioner Jeff Cox did not return calls for comment.

According to the recent suit, the state told Cass County on June 16 that it owed the money following an audit and Cass County’s loss in the first lawsuit. The state provided a spreadsheet outlining a schedule for repaying the $966,692.

Cass County contends that Missouri law doesn’t give the state revenue director authority to fix the mistake by withholding those funds.

The revenue department is relying on a statute that says, generally, that its director will perform all functions incident to the administration, collection, enforcement and operation of the tax.

The Missouri attorney general’s office response says the law speaks for itself, contending that the court already ruled against Cass County once on an identical claim. It asks Circuit Judge Jon E. Beetem to dismiss the suit.

Lee’s Summit officials said the state was taking steps to resolve the overpayment of utility sales taxes, but a preliminary order by the court prohibited the director from taking action until the litigation is resolved.

Because the dispute between Cass County and the Missouri Department of Revenue hasn’t been resolved, that money isn’t earmarked for any purpose in Lee’s Summit’s 2014-15 budget. Any of it received will go into the general fund balance, officials said.

On Aug. 19, the City Council’s Finance and Budget Committee is to consider a proposal for auditing Lee’s Summit franchise taxes to see if there are other errors. The city requested proposals for that service in April last year.

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