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Archive for Wednesday, March 4, 1992

POSTMARK SNAFU COULD PENALIZE LOCAL BUSINESSES

March 4, 1992

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There's a chance local businesses that didn't mail their January sales tax remittances to the state until the deadline last Wednesday still could be assessed a penalty and interest.

Lawrence Postmaster Bill Reynolds confirmed Tuesday that a postmark cancellation machine in the postal service's Kansas City, Mo., mail processing plant was stamping an incorrect postmark last Wednesday.

Local property manager Rob Phillips said he contacted the local post office last week when he realized that he had received mail from a tenant two days earlier than the date on the postmark.

Phillips said he was concerned because the letter should have been postmarked with last Wednesday's date, Feb. 25, but bore a Feb. 28 cancellation. That raised a question for Phillips of whether sales taxes mailed on the Feb. 25 deadline would be considered late by the Kansas Department of Revenue.

PHILLIPS, who owns Kansas Properties Inc., said it was not unusual for businesses that must remit sales taxes to the state to wait until the deadline to file.

The Revenue Department, which collects the state and local sales taxes from Kansas businesses, uses postmarks to determine whether to assess a 10 percent penalty on taxes not remitted within 60 days of the due date, said Mark Ciardullo, chief of the department's business tax bureau. Businesses that mail their taxes late also are subject to a 1.5 percent monthly interest assessment.

Ciardullo said today that because it may be difficult to prove that any business assessed a penalty and interest actually mailed its tax filing on Feb. 25, there's no pat answer for how the Revenue Department will respond to complaints that might come from businesses.

"If the taxpayer would be assessed a penalty and interest for a late filing, for being delinquent, he could apply to the director (of taxation) for a waiver," Ciardullo said. "We would make a determination on a case-by-case basis."

REYNOLDS said he had no way of knowing how many Lawrence businesses if any might be affected.

He explained that mail from Lawrence, along with mail from about 100 other cities, is processed in Kansas City, Mo. Reynolds said he believed the incorrect postmark was printed by just one of the many cancellation machines in use at that processing center and probably by just one of the several cancellation heads in that machine.

Reynolds said he could confirm that an erroneous postmark was printed on the 25th because a postal customer, presumably Phillips, contacted his office on the 26th about a piece of mail postmarked the 28th.

However, the postmaster said, "that doesn't mean it happened to all the mail that was processed from Lawrence."

Reynolds said he would be happy to cooperate with any business that wanted to file a claim seeking a penalty waiver from the state. However, he acknowledged that the postal service is limited in the assistance it can provide.

"I DON'T know if there is a practical recourse. We can confirm what we know," he said. "What we can tell the state of Kansas is that there is at least one instance of mail processed in Kansas City, Mo., where we confirmed that the wrong postmark was used."

Reynolds said the date error is rare but not unheard of. A postmark problem also occurred in September 1987, he said.

"Most businesses we deal with are very understanding and reasonable," he said. "If they conduct their business by mail, they understand that sometimes this happens."

Businesses that filed their January sales taxes by the Feb. 25 deadline probably won't find out whether they've been assessed a penalty and interest for a few weeks.

Phillips said he has contacted revenue officials in Topeka about his concerns. "They told me to call back in four weeks," he said.

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