Tuesday, July 20, 2010

Updated: Meals tax paid by citizens is not a slush fund

Vice-Mayor Dave Trinkle

UPDATED July 21, 2010: (See Trinkle responds below just prior to The Roanoke Star-Sentinel print deadline)

Roanoke City’s Code of Ordinances says the meals tax citizens pay when dinning out is to be “held in trust by the seller until remitted to the treasurer.” It means exactly that according to Tim Spencer in the city attorney’s office.

“It’s not a slush fund,” said Spencer. It is not to be used for paying the light bill or making payroll. The meals tax citizens pay should be placed in an invisible cookie jar to be held by the seller until remitted to the treasurer on the 20thof every month.

Vice-Mayor David Trinkle’s two restaurants were treated no differently than any other delinquent restaurateur according to Ann Shawver, Director of Finance. “Everybody needs to tow the line and pay their share and hopefully that keeps the burden down for [everyone],” said Shawver.

The city code gives the director of finance “powers and authorities of police officers” including the authority to issue a summons and involve the commonwealth attorney’s office if necessary.

Trinkle was sent letters, phoned and notified personally in the months he was delinquent in paying the meals tax to the city. “Trinkle was working with us,” said Shawver. “We don’t use collection techniques unless we need to.”

Shawver was confident that Trinkle’s $50,000 delinquent amount reported by WDBJ7 did not come from a city department. She stressed that the delinquent dollar amount of a businesses meals tax, admission tax and/or lodging tax is confidential information.

TRINKLE RESPONDS July 21: Trinkle advised the Star-Sentinel that he never confirmed the $50K amount. “It is wrong and I have no idea where it came from,” said Trinkle. “The paper (Roanoke Times) has been asked where they got their information – I think from Keith Humphrey. The real numbers are much lower and perhaps even lower than that depending on how you define it . . . Suffice it to say several weeks before Keith’s story, I began putting money in to pay several bills. I had seen the writing on the wall that this time they (the restaurants) weren’t going to pull themselves out as they had before – that the Spring just didn’t have the numbers from even a year ago.”

Trinkleadded that, “I have found operating small businesses to be an incredible life experience and one where I have learned a great deal about customer satisfaction, marketing, budgeting, labor management and so on. I am never at a loss to share these experiences with others.

Meals tax delinquencies have yielded three general district court cases, six ABC hearings, fifteen tax liens and two summonses during Shawver’s tenure as finance director. The meals tax is handled through the finance department.

Out of the 480 accounts that pay food and beverage tax twenty-eight were delinquent as of the July 14. Some of the accounts could be inactive and total delinquencies change from month to month.

A growing delinquent balance and a refusal to work with the finance department triggers further action. For all fiscal year 2010 tax delinquencies 16 summons had been issued. Shawver clarified that a summons is in the form of a letter. “Summoning the individual to the city attorney’s office [is a way] to get their attention,” said Shawver.

In general if people respond to her office explaining their situation and follow through with a plan of payment then other action is avoided. For all tax delinquencies in FY10 there were 335 tax liens that included wage garnishments. About 50 certified letters were sent out with some resulting in court cases. No one has ever been charged with a class one misdemeanor as city code permits.

The five-percent sales tax in addition to the meals tax goes directly to the state. Any discrepancies on the one-percent returned to localities is handled with the state and not with the retailer.

It’s not just restaurants that are required to pay the meals tax but anywhere prepared food or beverage is served.

Shawver said regarding tax collection options, “we’ve got a lot of tools in our toolbox and we’re not afraid to use them.”

Posted By Valerie Garner

Categories: Politics, Roanoke City Politics

Tags: , , ,

Comments (1)

James B

July 22nd, 2010 at 11:01 AM    

Just absurd. A person setting tax policy for the city who is in arrears 8 months. It’s pathetic. Trinkle should resign from the city council.

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