Last week, interim borough manager Bud Cassidy told the Kodiak borough assembly that an audit of Evergreen Timber’s logging operations on Afognak Island revealed the company had left some heavy equipment off its property tax forms and underpaid severance taxes.
After the borough notified Trans-Pac, the parent company of Evergreen Timber, the borough was paid more than $300,000 in back taxes and interest penalties.
Karleton Short, the borough’s finance director, said the borough conducts annual audits of commercial taxpayers by contracting with Altman, Rogers and Co. of Anchorage.
“We found other small mistakes, but this was the only substantial find,” Short said.
Logging makes up a significant portion of borough revenue, thanks to severance taxes charged to companies that remove natural resources from the borough.
Severance taxes also apply to fish, but Short said Kodiak’s fish processors are very good about their taxes. “We’ve noticed that the canneries were probably the most accurate,” he said.
The unexpected boon will show up in the borough’s finances for the current fiscal year. “It’s a savings to the borough that we can use for everything from education to parks and recreation,” Short said.
He added that annual audits also tend to spur other taxpayers to file accurate and timely information.
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