WOODSTOCK– Shenandoah County voters can decide during the Nov. 5 election if the Board of Supervisors should impose a local meals tax.
The board voted 5-1 at its meeting Thursday to adopt a resolution asking a Circuit Court judge to put a referendum on the ballot for the upcoming regular election that asks voters if the county should impose a tax on most prepared meals and beverages.
Chairman Conrad Helsley, Vice Chairman John R. “Dick” Neese and Supervisors Steve Baker, Dennis Morris and Karl Roulston voted in support of the resolution. Supervisor Richard Walker voted against the resolution.
Morris made the motion to adopt the resolution and said he would want the county to earmark the revenue generated by a meals tax to go to capital needs for public safety. The county could then use the revenue to help pay for roof maintenance at fire stations or for emergency vehicles, among other needs, Morris explained.
Walker told the board he opposed the meals tax because doing so would ultimately hurt businesses as an unintended consequence. Walker also said the county should not impose an additional tax just to keep from needing to increase another levy. Rather, the county should control its spending, Walker said.
Morris rebutted Walker’s claim and said consumers, not the businesses, pay a meals tax. The businesses only collect the funds generated by the sales of meals and beverages and then send the money to the county treasurer’s office.
Roulston reminded the board that its action Thursday just puts the issue on the ballot and lets the voters answer the question of whether or not the county should impose a meals tax.
The court must issue the order no later than Aug. 16 to place the question on the ballot as a referendum, County Administrator Evan Vass has said. The question then would appear as a referendum on the ballot. Voters would choose whether or not the county should move forward and adopt a meals tax. Should a majority of the voters show support for the meals tax, the Board of Supervisors then would take action to adopt an ordinance establishing the tax.
Supervisors can set the tax rate at a level not to exceed 4 percent per $1 as limited by state code. Should a majority of voters show they don’t support the tax, the county would need to wait at least three years to put such a question on the ballot again.
Counties can impose a meals tax through a ballot referendum at a rate not to exceed 4 percent. Towns and cities do not need to ask voters to weigh in on a meals tax. Rather, towns and cities can establish and set meals tax rates by adopting ordinances. State code does not limit the rate towns and cities can set.
Frederick and Warren counties collect millions of dollars in meals tax revenue each year, according to information Vass provided to the board in June. Towns also collect hundreds of thousands of dollars annually from their meals taxes.
Virginia state code defines a restaurant as a place where food is prepared for service to the public on or off premises. Cafes, cafeterias, lunchrooms, short-order places and taverns fall under the definition of restaurants.
A meals tax would affect only establishments meeting the state definition and located in the unincorporated areas of the county, not those within each town's limits.
A meals tax would not apply to:
• Food sold in vending machines.
• Food provided to people staying in boarding houses.
• Alcoholic beverages sold in factory-sealed containers.
• Factory cafeterias.
• Food provided by a restaurant to employees as part of their compensation.
• Food provided by nursing homes, hospitals and similar facilities.
• Food provided by daycare centers.
• Food provided to the elderly through programs such as Meals On Wheels.