Now is not the time for Verizon Northwest to be asking the City of Lake Stevens for $94,782 the city was paid for utility taxes on digital subscriber line (DSL) service. Cities across the country are tightening their belts and Lake Stevens is no exception.
According to a letter sent to the city on Dec. 31, 2009, The Washington State Supreme Court has held that imposing taxes on the sale of interstate services is prohibited, thus the payments made by Verizon Northwest to the city between Jan. 1, 2005 and June 30, 2008 for utility taxes on DSL line should be reimbursed to Verizon. Several cities within South Snohomish County and North King County have been asked to reimburse the almost $2 million to Verizon.
Arlington has been asked to pay $150,000, while the City of Everett is over a quarter of a million dollars. Other cities contacted by Verizon include Bothell, Mount Lake Terrace, Marysville, Snohomish, Mukilteo, Monroe and Stanwood.
Many questions have come up regarding the request for the reimbursement of the money, like where is the proof and what is their legal justification for their request?
“There is no documentation proving that amount of money,” Lake Stevens City Administrator Jan Berg said. “Is the statement correct, did they incorrectly collect on our behalf? If it is proved that they did erroneously collect how do they remit it back to the taxpayers they collected it from? That is a concern for us.”
The City of Lake Stevens approved giving the law firm Ogden Murphy Wallace $1,000 to join together with other cities in a joint defense.
“The city council authorized the city to commit $1,000 to share in the cost of their initial review,” Berg said. The two-page letter doesn’t state how Verizon is planning on handling these concerns and that is one of the items that will be looked at by the legal firm.
There are over 4,700 Verizon customers that were charged this utility tax. Verizon Northwest was contacted by the Journal, however, there was no response before press time.