Gov. Brian Schweitzer says he once asked state Revenue Director Dan Bucks if there was a way to collect more tax revenue without raising taxes.

Now, the governor said Montana had its most successful year ever as audit collections hit $78.3 million in fiscal year 2010.

 

Audit collections have risen from $30 million in fiscal years 2002-2004, the governor said, praising Bucks.

“He’s done a remarkable job,” Schweitzer said.

Bucks attributed the increase to more aggressive collecting by Department of Revenue staff, seeking out the out-of-state taxpayers – both individuals and businesses – who owed Montana money.

These taxpayers typically pay only about 11 percent of Montana’s total state taxes, but represent about 50 percent of the audit collections, Schweitzer said.

One entity alone paid $12 million to the state, officials said.

The collection added to the reserve in the General Fund, bringing the total to $351 million, state officials said.

Officials said about 70 percent of the money collected went to the state’s General Fund. In some years, a higher percentage goes into the fund..

Schweitzer warned lawmakers to not come to Helena in January thinking they will cut funds for audits. And he added funds for Department of Revenue audits have been cut in previous years.

“Some members of the Legislature were confused about raising taxes with collecting taxes,” he said.

Audit collections come from two major sources: taxpayers who didn’t file, but should have, and taxpayers who underreported or claimed inflated refunds. Taxpayers include corporations, small businesses, and individuals.

Schweitzer said that over the last two years, for every dollar spent, the Revenue Department returned $8 to the public treasury. Some audit revenues, especially natural resource taxes, go to local governments and help keep property taxes lower.

Bucks thanked the governor and credited the Revenue staff for the department’s success.

Schweitzer said if state government were a circus, Bucks would be the ticket hawker working the entrance at the front gate.

“He’s the guy who makes sure that everyone who comes in pays.”