West Dundee reimburses Carpentersville for sales tax mistake
Two stores in Spring Hill Mall had been reporting sales taxes to the wrong municipality for years, an audit conducted by village staffs found.
As a result, West Dundee officials have agreed to reimburse Carpentersville for three years worth of misallocated sales tax revenue, amounting to $43,833, according to village documents.
The issue was brought to light during a review of the mall's sales tax figures last year, West Dundee Village Manager Joe Cavallaro said in a memo. At the time, the staffs from both villages were working out the details of a sales tax sharing agreement with mall owner Rouse Properties, which would allot some incremental sales tax revenue toward the funding of a $37.8 million mall redevelopment project.
Because Spring Hill Mall is located in both West Dundee and Carpentersville, it has reporting obligations to both villages. Carpentersville Village Manager J. Mark Rooney said the process can get confusing when stores such as the two in question - Perfume Center and Christopher & Banks - are physically located in Carpentersville but use the mall's management offices in West Dundee as their mailing addresses.
"That's where the error resulted," Rooney said. "It was one of those unique things because of the layout of the mall."
Cavallaro said West Dundee officials immediately reported the mistake to the state and started working with Carpentersville staff members to come to a resolution.
After being notified of an error, the Illinois Department of Revenue typically credits a governing body for six months, West Dundee Trustee Michelle Kembitzky said, but Carpentersville officials indicated they hoped to be compensated for longer.
The West Dundee village board voted this week to repay Carpentersville for the sales tax monies dating back to January 2013.
"I definitely think this is a good compromise," Kembitzky said.
Rooney said various measures are being implemented to ensure the error doesn't happen again.
"Everyone worked together for the best interest of intergovernmental cooperation," he said.