Supervisors pan push to give counties more taxing power

WOODSTOCK – Shenandoah County leaders won’t back an effort to ask state legislators to give localities equal power to tax meals.

The Board of Supervisors on Thursday briefly discussed a request to consider supporting a change in state law pertaining to the levy of meals taxes. At least three members said they wouldn’t support a countywide meals tax even though the matter discussed pertained only to endorsing the idea of leveling the playing field for all localities when it comes to imposing the levy.

County Administrator Mary T. Price gave a presentation to the board about meals tax at its work session that included a history of the locality’s efforts to impose the levy. District 4 Supervisor Cindy Bailey quickly voiced her position.

“I’m not going to support an additional tax,” Bailey said.

District 5 Supervisor Marsha Shruntz said the board should “do nothing.”

Vice Chairman Richard Walker also opposed the tax.

“I find the establishment of we’re gonna tax this but not tax this … to be something that I could never support,” Walker said.

Chairman Conrad Helsley said he felt counties should have the same taxing authority as towns and cities. The county does need to diversify its revenue, Helsley said.

“This isn’t gonna create a major amount of revenue,” Helsley said.

Walker asked how many establishments that would collect such a tax operate in the county outside the incorporated towns.

“Are we just sort of picking on Bryce?” Walker asked.

Several businesses in the Toms Brook area off Interstate 81 would collect the tax, Price said.

“But it does take a little of your pressure off of your real estate because that’s our main source,” Helsley said. “Those are the two points that I think makes it appealing.

Whether or not legislators Del. C. Todd Gilbert, R-Woodstock, and state Sen. Mark Obenshain, R-Harrisonburg, would carry the push for equal taxing authority for counties to the General Assembly remains uncertain.

“If they don’t support it, it don’t matter what you do or what you pass or what you don’t pass, so I don’t know the answer to that question,” Helsley said. “But it would equalize our abilities.”

District 2 Supervisor Steven Baker said businesses in most other localities charge a meals tax that gives them another revenue source and “every little bit helps.”

“It’s a small amount but it does add up and it just puts you on an equal playing field with other localities,” Baker said.

District 1 Supervisor John R. “Dick” Neese reminded the board that adopting the resolution would not establish the tax. Helsley concurred, noting that the legislature ultimately would decide whether or not to change the state code to give counties the taxing power.

Meals tax, sometimes referred to as a pass-through tax, is a levy charged on prepared food and beverages including, but not limited to, restaurants, coffee shops, cafes, grocery stores, convenience stores and food trucks. The tax also applies to alcoholic and non-alcoholic beverages served with a meal. The tax does not apply to groceries, vending machines, nonprofit churches, schools, volunteer fire departments and rescue squads and others as listed in code.

In 2015, 47 of the 95 counties in Virginia assessed a meals tax, Price said. Most counties with a meals tax assess at the state maximum of 4 percent. Price said 38 cities and 113 towns assess the tax. Frederick, Page, Rappahannock, Rockingham and Warren counties charge a meals tax. A map provided by Price shows Shenandoah County remains one of a few localities in the region that doesn’t charge a tax.

All six towns in Shenandoah County assess a meals tax between 5 and 6 percent.

Price received a letter from Neil Morgan, county administrator for York County, in which he notes that his Board of Supervisors asked him to set up a strategy to seek legislative approval to change the state code pertaining to meals tax – specifically to give equal taxation authority to all localities.

Rockingham County Board of Supervisors adopted a resolution of support for the change in late September.

State code allows cities and towns to impose a meals tax without holding a voter referendum. However, counties must hold a referendum to gauge voter support for the levy. The Board of Supervisors can adopt a resolution asking a judge to order the referendum or 10 percent of registered voters can file a petition with the circuit court. The county would hold the referendum as a ballot question during an election.

State code limits meals tax at 4 percent in counties and 8 percent in towns and cities. York County also wants the state to increase the meals tax limit to 8 percent for counties.

Supporters of the meals tax say the levy is a way to generate more revenue and relieve some pressure to use real estate tax.

Data provided by Price shows how much the following localities collected in meals tax revenue in 2015:
Strasburg – $583,465
Toms Brook – $3,668
Woodstock – $1.1 million
Edinburg – $43,913
Mount Jackson – $332,267
New Market – $355,964
Warren County – $871,933
Frederick County – $4.53 million
Rockingham County – $1.03 million
Page County – $272,757

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com.