Finance officials with the State of North Carolina are having some sort of mystery problem doing the math on sales tax refunds for local governments and non-profits.

The problem is thwarting the ability of public and private entities across the state to plan for coming budgets or even know the amount of money they have access to at the current time.

Guilford County Manager Mike Halford recently revealed the problem to the Guilford County Board of Commissioners at a work session, explaining that the snafu was making it difficult to do financial planning or to know how much money the county has to spend.

Here’s how the state’s tax system works. You make a purchase and the sales tax is tacked on. If you’re just a regular person, you never see that money again. However, if you’re a non-profit agency or a county government, you have to pay the sales tax but then you apply for a refund.

“The state is continuing to have issues with sales tax refunds,” Halford told the commissioners at a Thursday, March 16 meeting in the first-floor conference room of the Old Guilford County Court House.  “What should be happening is, each month, there should be an accurate accounting of what those refunds are for some period.”

The county should know what revenue from that source it has available.  But now it doesn’t.

“We learned recently that the state has some issues with calculating those sales tax refunds,” Halford said. “We don’t know what that problem is. What I will tell you is that, in past years, there could be a swing of four, five, six, or seven million dollars from one month to the next for the refunds – depending on when the state caught up.”

The county manager added that it makes knowing current and future revenues  from that source very difficult.

“So, what that’s telling me is we can’t have as high confidence as we did in current sales tax revenues for this year, and, going into next year, it’s going to be harder to predict that,” he added.

Halford said that, in the meantime, the county needed to err on the side of caution.

“So, our ability to be aggressive in those projections is going to be limited until the state figures out what’s going on,” he told the board.