The city of Sedona will employ a sales tax auditor to ensure every business is paying its fair share of sales tax.

The Sedona City Council approved hiring an auditor Jan. 12 to look into what businesses are paying in regard to sales tax.

The city will seek requests for proposal to hire an auditor beginning in July.

City Manager Tim Ernster said the audit could also show if businesses are paying too much and which deserve refunds.

“It’s not always where they have to pay more taxes,” he said.

Ernster said the money for the auditor will be in the 2010-2011 city budget.

The city is convinced some businesses are not paying the right amount and Ernster said he wants to correct this.

He said what Sedona is going to do is not uncommon. He added 42 cities and towns in Arizona are already doing sales tax audits, including the vast majority in Yavapai County.

The city gets its share about 60 days after the state receives the revenue.

He said not all businesses will be audited, and most will not see the firm.

“There is a process in choosing the businesses that will be audited,” Ernster said. The auditor might see red flags when reviewing the city’s books.

He said many things are up in the air regarding what the auditing firm will actually do. Only 20 to 25 audits are a real possibility.

He said the city and auditor may pick a few businesses from different sectors such as two restaurants and two retail shops.

There are other ways the city can find out if a business is not paying its share, Ernester said. A member of the public could report a business.

“The auditing firm may see something that does make sense to them,” Ernster added.

He stressed nothing has been decided on as far as which steps will be taken in determining how to proceed.

“The real issue is to make sure businesses are [paying] what they need to,” he said.

Michael Maresh can be reached at 282-7795. ext. 125, or e-mail mmaresh@larsonnewspapers.com