City Finance Director Steve Hoglund said the state will require that their share of the uncollected utility tax be paid for the last four years, not all the way back to 1993 when the then City Council approved the exemption. But, he said the amount might be tempered because an audit of the city's books now being undertaken by the state has revealed that the city hasn't taken some credits it could have over the years. The state discovered the tax exemption during that audit.
He explained to the Council Monday night that the city should have been collecting a utility tax and passing a substantial portion of it along to the state. Hoglund couldn't explain why the tax exemption was put in place in 1993.
Hoglund said, with the Council approval Monday night, the utility tax will be collected starting with the September bills for 14 agencies that had been exempted. The 4 largest agencies are the Port of Anacortes, Island Hospital, the school district and Washington State Ferries. They will end up paying "a few hundred dollars" a month.