The City of Bethel is working to correct its real estate sales tax and distribute refunds after accidentally overcharging people for more than a decade.
Patty Burley, city attorney, recently discovered the problem and says the city overcharged 163 transactions, collecting $100,076.08 in excess charges since 2002.
Burley says the most the city could have overcharged someone is $1,200.
In 2002, the Bethel city council voted to reduce the portion of money the city taxes when someone buys or sells real estate in Bethel.
At the time, the city taxed 20 percent of a real estate’s selling price up to $375,000. Anything over that amount wasn’t taxed.
The revised ordinance reduced the cap to $275,000, but when the city published the tax code the change never made it to the books.
Burley says the city is working to right its wrong. Anyone overcharged will receive a refund with interest at 3.5 percent compounded annually.
Burley says those affected can start applying for refunds starting April 13 when the city posts the claim forms on their website and makes them available at the finance office in city hall. The city is also contacting title companies to distribute the claim documents.
City Council will address an ordinance at its March 22 meeting to correct the city’s typo, authorize the refund program, and modify the budget to accommodate the returns.
