OIG No. 20-09: Report of Resort Tax Audit Activities Summary
Page 1 of 2
April 17, 2020
TO: Honorable Mayor and Members of the City Commission
FROM: Joseph Centorino, Inspector General
PROJECT Resort Tax Audit Activities Summary
OIG No. 20-09
PERIOD: October 1, 2019 through March 31, 2020
Within the Office of the Inspector General’s Audit Division are Tax Auditors that verify registered
businesses’ compliance with the City Code’s Resort Tax provisions. They conduct audits of
annual filers, e.g., apartment buildings, that typically remit little or no resort taxes to the City due
to the frequency of residencies exceeding six (6) months and monthly filers, e.g., hotels,
nightclubs and restaurants, which have frequent daily transactions in which resort taxes are owed
to the City. Annual filers are required to file once per year for the period of May through April by
May 20th (adjusted for weekends and holidays) while monthly filers must file each month prior to
or on the twentieth (adjusted for weekends and holidays). The objective of these audit s is to
determine whether registered taxpayers have accurately reported their revenues and timely
remitted any taxes due.
There are currently more than 1,800 Resort Tax accounts, which is comprised of approximately
1,000 annual filers and 800 monthly filers. As the annual filers are expected to remit little or no
resort taxes, our primary focus is to conduct audits of monthly filers. However, we do routinely
conduct audits of annual filers that concentrate primarily on determining whether tested apartment
building tenants satisfy the requirement of City Code Section 102-308(3) that there be a
continuous length of residency for longer than six (6) months to be exempt from taxation. A greater
emphasis had been placed on annual filers recently due to their large volume and since many
had not been audited in years.
Although the Office of the Inspector General determines the assessment (if any) based on its
audit, it is not involved thereafter in the collection phase, which is subject to further consideration,
adjustment, appeal, settlement or other resolution involving other City processes and agencies.
This process helps achieve a proper segregation of duties from those performing the audit.
One must keep in mind that assessments are not always paid timely, and may result in liens being
imposed by the City on local properties owned by the delinquent taxpayers or corporate officers,
which can remain in effect for up to twenty (20) years. Any collected assessments represent
Page 2 of 2
additional revenues to the City that would not have been received if these audits had not been
performed.
In addition, City Code Section 102-311(6) states “If any operator charged in this section fails or
refuses to make his records available for inspection so that no audit or examination has been
made of the books and records of such operator or person, fails or refuses to register as an
operator, or fails to make a report and pay the tax as provided by this division, or makes a
grossly incorrect report, or makes a report that is false or fra udulent, it shall be the duty of the
city to make an assessment from an estimate based upon the best information then available
to it for the taxable period of sales or rentals, together with interest, plus penalty, if such have
accrued, as the case may be. Then the city shall proceed to collect such taxes, interest and
penalty on the basis of such assessment, which shall be considered prima facie correct; and
the burden to show the contrary shall rest with the operator.” These estimated assessments
are only levied when the taxpayer has opted not to cooperate after repeated attempts or has
not maintained the required supporting documentation. If the taxpayer subsequently provides
the required records, the assigned Tax Auditor will review the provided new i nformation and
revise the estimated assessment as needed. Conversely, some taxpayers pay the estimated
assessments, or they may not be refuted and are final.
In summary, Tax Auditors have completed a total of 58 audits between October 1, 2019 and
March 31, 2020 with assessments levied of $838,726.06. The following points provide a more
specific breakdown, separated by annual and monthly filers, of the number of completed audits
and their corresponding assessments:
A. Annual Filers – 30 audits completed with assessments totaling $126,135.02
1. Four (4) taxpayers did not provide records which resulted in estimated
assessments totaling $117,874.58
2. Seventeen (17) audits resulted in $0.00 assessments as no material differences
were noted from the amounts reported and remitted
3. Nine (9) audits resulted in assessments levied ranging from a low of $311.04 to a
high of $1,492.59
B. Monthly Filers – 28 audits completed with assessments totaling $712,591.04
1. Six (6) taxpayers did not provide records which resulted in estimated assessments
totaling $602,067.22
2. Eight (8) audits resulted in $0.00 assessments as no material differences were
noted from the amounts reported and remitted
3. Fourteen (14) audits resulted in assessments levied ranging from a low of $682.80
to a high of $29,014.70