That's what the city fined the phone company because it filed its statement two days after the April 1 deadline set by the city assessor's office. When Bell officials were told of the penalty, they went looking for friends in all the right places and found influential allies in Mayor Francis Slay and Assessor Samuel Simon, who both agreed to intercede on Bell's behalf.
But the only person who can grant a waiver of the penalty is Comptroller Darlene Green, and she refused. Green says that anyone who files late is fined an amount equal to 25 percent of their personal-property-tax bill, no matter who he is.
"We're not relieving a corporate giant on the one hand and then on the other hand penalizing the citizen who can't write the letter or who decides to pay the extra 25 percent because they decided they were wrong. It's a matter of principle," says Green. "Imagine if I were business-friendly to Southwestern Bell but not individually friendly to the citizen."
Green thought the matter had been settled months ago with an exchange of letters and memos. An April 19 letter to Green from John Sondag, executive director of external affairs for Southwestern Bell, asks her to waive the penalty. A May 20 memo from Simon to Green states that the assessor's office saw nothing in Sondag's letter, or in a subsequent investigation, "that mitigates the situation."
The fine stood.
But then, a July 26 letter from Simon to Green requests "relief from this penalty" for Southwestern Bell. Simon cites "the historical timeliness" of the phone company's tax payments as a reason to grant a waiver. The second letter surprised Green.
"We got his letter that was totally different than the one we got in May," says Green. "So there was a question: It's two months later -- what's new? When I did sit down with the Southwestern Bell people, the gentleman said yes, he had spoken to Jeff Rainford. So it was kind of obvious."
Rainford, the mayor's chief of staff, admits to speaking with Sondag and says he looked into getting Bell off the hook. Simon checked with the mayor's office for direction, Rainford says.
"The mayor sets policy," says Rainford. "He and Sam believed that because Southwestern Bell is such a major contributor to the city's tax base and the number of jobs and the fact that we're hopeful they'll bring more jobs here that it should be allowed to happen. But the law is the law, and it says you must have made a manifest error, and there was no error."
Because the assessor's office stated that nothing that any of its workers did contributed to Southwestern Bell's late filing, Green says, she could not grant a waiver.
"We want to take action to relieve taxpayers where necessary," says Green. "But if the assessor is not saying they erred in this case, I have to go with what's in front of me. It's in black and white."
Rainford says that once the offices of the assessor and mayor were clear about what was required by the comptroller to grant the waiver, they stopped their efforts to drop the penalty.
"We want to be a welcoming place for business and for people to create jobs, but at the moment the law is the law, and, fortunately or unfortunately, you're just going to have to live with it," says Rainford.
Two years ago, A.G. Edwards, the investment firm headquartered in the city, faced a similar situation but managed to dodge a $700,000 fine by appealing to the State Tax Commission. The firm assumed that it had an extra business day to file its statement because the April 1 deadline fell on a Saturday. To clarify the issue, Green worked with state Representative Amber Boykins (D-St. Louis) on legislation saying that if April 1 falls on a Saturday or Sunday, the last day for filing is the next business day.
Emily MacDonald, a spokeswoman for Southwestern Bell, says the company "is not interested" in any formal appeal and will pay the penalty in full by the due date, December 31. She says the "excessive amount of the penalty" is the reason Southwestern Bell asked for leniency from City Hall.
Southwestern Bell was late last year in filing its personal-property-tax statement and paid a penalty of slightly more than $300,000. Rainford says it's not surprising that large corporations seek relief from the penalty more often than smaller companies or individuals.
"If you're Ma and Pa Small-Businessperson and you pay late and you have a $50 fine, you're not going to be jumping for joy, but it's 'OK, it's $50.' If you get a $700,000 fine or a $250,000 fine, it gets your attention," he says. "So we're trying to have a good business climate, but at the end of the day, the city does not have the discretion unless there is a manifest error."
Compared with other counties, the city does come off as an ogre. In every county in the state, the highest penalty for late filing of a personal-property-tax statement is $100. Rainford would like to see whether the city could be a little more understanding, but that would require a change in state statute.
"It's not very business-friendly," says Rainford. "What we would like to do is look at best practices and what other states do and other counties in other states do. I can't imagine charging anybody 25 percent, whether it's a residential home, a business or whatever, for turning something in one day late. It seems pretty heavy-handed. But it's not up to me."
At a time when the city is short on cash and eager to keep the businesses it has within its limits, it makes sense to reduce the filing penalty so that it fits with the state's 113 counties'. But then, what makes sense isn't always what ends up happening in City Hall or Jefferson City.
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