Report says all occupational tax refunds have been sent

The court-appointed administrator over refunds from Jefferson County‘s replacement occupational tax has distributed more than $19 million in back taxes, according to court records.

The judge in the case also approved the administrator’s request for $416,000 to be paid in legal and accounting fees, court records show.

The report filed this week by the administrator, Simeon Penton, is the first public accounting of the estimated $25 million in taxpayer money that Circuit Judge Charles Price on March 30 ordered to be refunded “as promptly as possible.”

occupational tax refund icon.jpg(NEWS ILLUSTRATION/NAPO MONASTERIO)

Price struck down the replacement occupational tax on Dec. 1, 2010, ruling that the law authorizing it had been improperly advertised.

That tax was passed in August 2009 in response to a different judge striking down the county’s decades-old, original occupational tax.

The refund period addressed in Penton’s report covered wages withheld between Dec. 1, 2010, and March 16, 2011, from people with jobs in Jefferson County. The Alabama Supreme Court allowed collections to continue during the county’s unsuccessful appeal.

Since his appointment, Penton has controlled a $19.3 million escrow fund holding tax collections for most of the refund period.

The administrator also was ordered to return an estimated $5 million in uncashed checks representing the last occupational tax withholdings that employers had sent to the county.

The report Penton filed with the court this week said he had returned all uncashed checks and “directed all distributions of refunded taxes.” It did not say when those refunds were made, and efforts Friday afternoon to reach Penton for more detail were unsuccessful.

On April 5, Price awarded $6.4 million in fees and expenses to the three lawyers who filed the suit in 2009, Wilson Green, Clay Lowe Jr. and Donald Jones Jr. The judge also awarded the two named plaintiffs in the case, Jeffrey Weissman and Keith Shannon, $7,500 each.

Those payments were deducted from the refund money, leaving $12.8 million to complete the taxpayer refunds, according to Penton’s report.

Price issued an order Wednesday approving a $386,185 payment to the Montgomery law firm where Penton works, Gilpin Givhan, and another $30,000 to the Montgomery accounting firm Wilson, Price, Barranco, Blankenship Billingsley, records show.

Penton’s report said the administrative fees Price approved this week cover all work through January 2012. After estimating that all expenses would total $525,000, Penton said in his report that he would seek court approval before making any other expenditures.

The taxpayers’ lawyers have an appeal pending before the Alabama Supreme Court seeking another $106.4 million in refunds of all occupational taxes collected from the law’s effective date on Aug. 14, 2009, through Price’s Dec. 1, 2010, order striking it down.

Price declined to award that money, citing the county’s dire economic situation.

Loss of the estimated $66 million per year from the occupational tax led to massive layoffs and service reductions by the county and was a factor in commissioners’ decision in November to file the largest government bankruptcy in U.S. history.

The appeal in the occupational tax case was automatically put on hold due to the county’s bankruptcy filing.

People who worked in Jefferson County in 2009 also are getting separate refunds from the original occupational tax, which Circuit Judge David Rains struck down in 2009.

The court-appointed special master in that case, Ed Gentle, has filed several reports detailing the refunds of about $38 million in tax collections during the county’s unsuccessful appeal of Rains’ ruling, records show.

Rains ordered the county to pay $1.1 million to cover Gentle’s fee and refund costs.

Penton’s fee for providing refunds from the replacement occupational tax will come from the tax collections held in escrow.

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