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Quartzsite council weighs hiring state-certified tax auditor to update decades-old local tax list
Summary
Council members discussed hiring a state-certified tax auditor to review the town's transaction privilege tax schedule and collections, citing revenue likely missed from storage units and certain commercial rentals. The proposal would use a certified auditor and an RFP to identify potential new or under-collected tax sources.
Quartzsite council members spent the largest portion of a budget work session debating whether to hire a state-certified tax auditor to review the town's transaction privilege tax schedule, which several members said has not been updated in roughly 40 years. Committee member (S2) framed the proposal as a revenue-recovery and compliance effort and urged the town to use auditors certified by the Arizona Department of Revenue.
"I highly recommend that we do a state qualified auditor," S2 said, adding the Town of Parker had hired the same kind of consultant and recovered additional revenue. S2 told colleagues the consultant could review the Model City Code selections the town adopted decades ago, identify taxable activities the town is not currently collecting on (S2 cited storage-unit operators and commercial rentals as examples) and recommend items to remove (S2 mentioned timbering) or add to the local list.
Staff (S4) and other council members discussed procurement and limits. Staff noted that the auditors S2 recommended are already vetted by the State Department of Revenue and suggested issuing an RFP targeted at certified auditors to limit unqualified bidders. "They understand not pulling the tax code backwards and forwards, but they know the process of getting the information and the authority to get the information to ensure we are getting the taxes based on our current list," S4 said.
Council members discussed potential revenue impacts and policy constraints. S2 estimated the town could be losing a "fair amount of revenue" and stressed the auditors would also know legal limits on local rates and tax categories under the Model City Code. The group briefly discussed raising the transient lodging (hotel) rate as an option; S2 noted hotels could be a candidate because raising that rate would affect relatively few residents.
No formal motion or vote was recorded during the session; members asked staff to draft next steps, including developing an RFP and contacting the State for a list of certified auditors. The council did not set a firm contract amount at the meeting; members discussed getting a cost estimate from an auditor in Parker as a baseline before issuing an RFP.
What happens next: Staff will prepare the procurement approach for council review. If the council proceeds with an RFP, the auditor’s report would be expected to recommend specific code changes, potential recoveries, and any limits the state or model code imposes before the town enacts rate changes.
