When Roanoke City’s Code of Ordinances says the meals tax citizens pay when dining out is to be “held in trust by the seller until remitted to the treasurer it means just 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 remittance to the treasurer by the 20th of every month.”
The comments were made in response to the revelation that Vice Mayor David Trinkle has been late on paying the meals tax owed to city coffers over the last several months – a story first reported in “investigative news” fashion by WDBJ Anchorman Keith Humphrey.
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 issuing a summons and involvement of 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 … we don’t use collection techniques unless we need to,” said Shawver.
Shawver was confident that the information reported by WDBJ that Trinkle owed $50,000 did not come from any city department. She stressed that the delinquent dollar amount of a businesses’ meals tax, admission tax and/or lodging tax is confidential information.
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.”
Trinkle added 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.”
Out of 480 accounts that pay food and beverage tax, twenty-eight were delinquent as of July 14. Some of the accounts could be inactive and total delinquencies change from month to month.
For specific meals tax delinquencies there have been three general district court cases, and six ABC hearings, fifteen tax leans and two summons during Shawver’s tenure as finance director. The meals tax is handled by the finance department.
A growing balance and refusal to work with the finance department would trigger further action. For all the tax delinquencies in fiscal year 2010 sixteen summons have been issued. Shawver clarified that a summons is more of a letter “summoning the individual to the city attorney’s office to get their attention.”
If people respond explaining their situation and follow through with a plan of payment then more severe action is avoided. For all tax delinquencies in FY10 there were 335 tax leans 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 that is 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.
Regarding tax collection options, Shawver said, “we’ve got a lot of tools in our toolbox and we’re not afraid to use them.”
By Valerie Garner [email protected]