Tax Collector fails to pay Canton tax money

Madison County never paid the city of Canton up to $475,000 in over-collected ad valorem tax payments that the Tax Collector’s Office has been unable to explain. 

Stephanie Smith, a forensic auditor with Ridgeland-based CPA firm Grantham Poole, was hired in July to find a $618,000 shortfall in the Tax Collector’s Office, which she later attributed to overpayment of tax collection commissions from the cities of Madison and Ridgeland. 

Last month, supervisors asked her to continue to investigate and see if there had been any payments not made to the city of Canton, which had a similar interlocal agreement as Madison and Ridgeland. 

During last Monday’s meeting of the Board of Supervisors, Smith said she found no evidence of overpayments going back to the city of Canton per the interlocal agreement. According to the agreements signed by the different municipalities, the Tax Collector’s Office would keep up to $75,000 in tax collections, with overage paid to the municipalities. 

That didn’t happen for Canton, though, despite the agreement being adopted in 2008. 

“To my knowledge, it has not been followed,” she told supervisors. “I did not go back and look all the way back to 2008, those records weren’t there for me readily available. I did look back as far as 2016. I know that it has not been adhered to since 2016 forward.”

She said she didn’t know if the statute of limitations prevented the county from repaying the city all of those years, saying it’s outside her scope.

Board Attorney Mike Espy said the statute of limitations was three years.

“If we have a contract with them now, I mean, why wouldn’t they be receiving the monies?” Board President Gerald Steen asked. 

Tax Collector Kay Pace, who is retiring after the term ends in December, said the money was “erroneously” paid into the county but couldn’t answer how many years or why, other than it was an error. 

“I think there really may not have been knowledge in the office there was this agreement in place,” Smith said. 

District 4 Supervisor Karl Banks asked Smith how much per year the city of Canton has not been paid. She estimated it to be around $45,000 per year for the last 5-6 years. 

“I’d like to know exactly how much they’ve been shorted over the period of the agreement,” Banks said. 

Banks went further to add that he didn’t care about the statute of limitations being three years and that these were Canton taxpayer funds. 

“That statute is related to defense of lawsuits,” Espy said. “If we’re guilty or liable, it’s three years.”

“When family owes family, family pays family regardless of three years,” Banks responded. “I would like to get a full accounting so we can get a full refund for the City of Canton.”

Banks then made a motion to get a full accounting and pay Canton, which was seconded by District 5 Supervisor Paul Griffin. 

Espy then interjected, asking for two weeks to review the law and research the county’s options. 

The matter was then tabled for the next meeting.