Auditor’s Office tells city to put tax money in escrow

HORN LAKE — The state Auditor’s Office says Horn Lake needs to place money collected from an unauthorized hotel-motel tax into an escrow account until the issue is resolved.

City officials told The Commercial Appeal yesterday they have already been doing so.

The issue stems from a $2 per night tax on hotel and motel rooms that is designed to promote the city. That’s according to the enabling legislation.

The measure has been renewed by legislators every four years since 2002 but was not renewed in 2011 because of an oversight.

City officials had hoped to get it renewed retroactively during the legislative session that ended yesterday, but the bill died in a Senate committee.

Earlier this week, Auditor Stacey Pickering had asked the Mississippi Department of Revenue for figures on how much the city has collected from the tax since last July 1.

Lisa Shoemaker, a spokesman for the state auditor, said Pickering spoke with Horn Lake Mayor Nat Baker yesterday and was told the city is working to move the funds, $71,800, into escrow.

“There is no investigation or criminal charges or anything like that,” Shoemaker said. “Right now, we are trying to deal with the tax and make sure those funds are not co-mingled (with other city funds).”

Without renewal, revenue the city has continued to collect since the legislation expired last July 1 has been unauthorized.

City-produced printouts showed the tax generated more than $98,000 since then, but city administrator Andrea Freeze said the total is actually $71,800 because the city’s fiscal year differs from the state fiscal year.

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