Tulsa city officials bracing for multimillion dollar tax refund to Williams

Thursday, August 8th 2002, 12:00 am
By: News On 6

TULSA, Okla. (AP) _ City officials are bracing for a multimillion-dollar tax refund that will be paid to bankrupt Williams Communications.

The company is seeking a sales tax and use tax refund of $8 million to $9 million in revenue originally paid to the city of Tulsa. The refund is for equipment purchased by Williams Communications from 1997 to 2000, company spokeswoman Deb Trevino said.

The equipment was stored in local warehouses until it was used in other states to build a cross-country communications network, Trevino said.

Williams Communications paid use and sales taxes on the equipment, but since it was used in locations out-of-state, it was not subject to tax in Oklahoma, Trevino said.

The state Auditor and Inspector's office has ruled that the refund is proper, she said.

The company didn't have an exact amount of the refund, and city and state officials would not name the business because of confidentiality regulations.

Williams Communications requested the refunds two years ago, within the three-year window permitted by law. City officials found out about the pending refund of sales and use taxes this past spring.

City and Tulsa County will see the first effects of the refund on September tax receipts, said June Cavendish, deputy director of taxpayer assistance for the Oklahoma Tax Commission.

The refund likely will be spread over a six- to eight-month period, Cavendish said.

The refund will cost Tulsa County an estimated $534,000 in combined use tax and sales tax revenue, county Fiscal Officer Wayne Carr said. County use tax revenue will be reduced by $89,000 for six consecutive months to pay a portion of the refund, Carr said.

The county will see a one-time $300,000 reduction in its monthly sales tax revenues to pay the balance of the refund, he said.

The reduction in sales tax revenue will have a minimal effect on county finances, but use tax revenues will be affected, Carr said.

The county receives each month between $150,000 and $120,000 in use tax revenues, which are used to retire revenue bonds issued to fund improvements at Expo Square, he said.

An exact amount of the refund to come from city taxes hasn't been finalized, city Finance Director Mike Kier said.

City officials are considering dipping into reserves to offset any revenue decrease associated with the refunds.