FILLMORE : Firm to Audit City’s Sales-Tax Revenues

The city of Fillmore hopes to increase its share of sales-tax revenue by hiring a consultant to uncover errors that local businesses make in reporting their sales to the state.

The sales-tax audit could bring the city as much as $100,000 in additional income, the consultant said.

The Fillmore City Council voted Tuesday to pay a Glendora revenue management company a minimum payment of $100 a month to discover if the city is due more than its current monthly average of $43,000 in sales-tax money.

Lloyd de Llamas of Hinderliter, de Llamas and Associates said sales-tax audits are common.

He said large cities may uncover a 2% error in reporting sales, while small communities such as Fillmore may see their revenue increase by as much as 20%.

“The State Board of Equalization does a tremendous job,” de Llamas said, “but they look more carefully at the number of dollars reported than at the point of sale.” He said confusion sometimes arises when out-of-state companies report sales taking place from a warehouse in one city, when in fact the sale occurred at a branch office in another town--such as Fillmore.

“It’s rare to find a company purposely giving misleading information,” de Llamas said, “but especially in your smaller cities, it can make a difference.”

City officials have blamed low sales-tax revenues for the decrease in Fillmore’s reserve fund, which at $80,000 is about one-fifth of what officials say would be a comfortable amount.

If Fillmore gains financially from the audit, the council agreed to pay the management company 15% of the increase for two years.