Norfolk, NE to pay back $544,000 to local business - KTIV News 4 Sioux City IA: News, Weather and Sports

Norfolk, NE to pay back $544,000 to local business

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A Siouxland city is scrambling to make up over half a million dollars the state says they owe to a company who overpaid on its sales taxes.

Imagine losing almost an entire month's worth of income because of a mistake you didn't make. That's kind of the situation facing the City of Norfolk right now.

City officials were told last month that they owe the Nebraska Department of Revenue $544,000.  The DOR says it is to make up sales tax money a Norfolk business mistakenly paid between 1999 and 2005.

City officials say they don't know who the company is. In fact, the tax isn't even levied by the city, it's paid to the state and then disbursed to the city.

City officials say there's no way they could have known that this overpayment was taking place, but they do know they have to pay it back, which is going to seriously affect their finances this spring.

Randy Gates, Norfolk Finance Manager said, "Our May sales tax receipts normally would be about $600,000. It will be probably less than $100,000 dollars after this. So it will almost wipe out our May sales tax receipts."

City officials say they would need about $33 million in additional taxable sales to make up for the loss.

What complicates things further is that the city will start putting its budget together in the next couple of months with a big question of how they'll make up for over a half a million dollars of lost revenue.

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