The City of Hoquiam has entered an agreement with a firm that will identify businesses currently not paying business and occupation (B&O) taxes to the city and collect the owed fees.
“It’s kind of like hiring a collection agency for B&O taxes,” said Hoquiam City Administrator Brian Shay. “They find companies that should be paying based on the way they are operating in our city, and they go out and collect those taxes.”
The company, DataMax, has “been working for several different cities and have had a lot of success,” said Shay. They target larger companies that do business within a city and can collect back B&O taxes for several years.
“Currently, we work in South Carolina, West Virginia and Kentucky,” said DataMax Vice President of Revenue Enhancement Kandi Ledford-Marler in a letter to the city July 31. “We started working in West Virginia in May of 2018, and to date have found our clients $2.6 million in that state alone.”
DataMax comes in with its own list of current businesses that operate in the city and cross-reference that with a list supplied from the city of companies that currently pay B&O taxes to the City of Hoquiam. According to Ledford-Marler’s letter, the company creates a list of 20 businesses each month, sends them to the city for approval, then begins the application and collection process.
The agreement shows DataMax is due 50 percent of all the proceeds it collects for the city for the two years under the agreement. After those two years, taxes collected go 100 percent to the city.
“It’s money we’re not receiving now, and we can get a shot at collecting taxes that should be paid to the City of Hoquiam with no impact on our existing businesses,” said Shay.
According to a list provided by DataMax, an unnamed city client contracted with DataMax with a population of 7,700, slightly below that of Hoquiam’s 8,500, collected more than $280,000 in taxes owed between 2015 and 2018 — $99,922 in 2018 alone.