090506 Meals TaxMEALS TAX TASK FORCE
MEALS TAX TASK FORCE
REPORT
REPORT
September 5, 2006
September 5, 2006
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Meals Tax Task Force Members
Meals Tax Task Force Members
Robert M Dyer -Sanford Cohen-
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CouncilmanVirginia Beach Central Business
District
Ron A Villanueva -
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CouncilmanStephen Romine-
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Chamber of Commerce
Delegate John Welch-
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Virginia House of DelegatesPatricia A. Phillips-
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Director of Finance
Chris Savvides-
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Virginia Beach Restaurant AssociationRita Sweet Bellitto-
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Virginia Beach School Board
Hu Odom -
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Virginia Beach Restaurant AssociationBill Brown-
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Minority Business Council
Flo McDaniel-
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Virginia Beach Restaurant Philip Kellam-
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AssociationCommissioner of the Revenue
Mike Standing-Dave Hansen-
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Virginia Beach Restaurant AssociationChief of Finance & Technology
Jerry Bryan-Bunk Abey-
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Virginia Beach Restaurant AssociationFinancial Analyst
Mike Kreider-Julia CiarloHammond-
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Virginia Beach Hotel/Motel AssociationVirginia Hospitality and Travel
Association
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Meals Tax Task Force Charge
Meals Tax Task Force Charge
Study impacts of current meals tax on
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citizens and restaurant community
Compare City’s meals tax to other cities in
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region, state, and nation
Identify City ordinances or policies that set
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aside meals tax proceeds for specific
purposes
Determine effect of meals tax on special
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tax districts and school revenue sharing
Analyze effects on revenue of repealing all
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or portion of meals tax
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Meals Tax Task Force Major Findings
Meals Tax Task Force Major Findings
Meals tax revenue has risen in City and throughout
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Hampton Roads despite the increases in meals tax
and sales tax rates since 2000
Meals tax rate in City of 5.5 cents is tied for lowest in
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Hampton Roads, lower than 12 other Virginia Cities,
but among the highest in the nation
Meal tax is dedicated: TGIF(.5 cent), TAP (.5 cent),
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Major Projects (.56 cent), Open Space (.44 cent);
General Fund (3.5 cents)
Meals tax has no direct effect on special tax districts
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or school revenue sharing
No readily identifiable source of revenue replacement
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was identified if meals tax reduced
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Recommendation #1
Recommendation #1
Support legislation to require referendum
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on meals tax rate increase
•House Bill 2023 introduced in 2005 General
Assembly
•Require a referendum be held by a city before
meals tax rate could be increased
•Delegate Welch to reintroduce in 2006 Session
•City has no immediate plans to increase meals
tax rate
•Represents a gesture of good faith with citizens
to support the proposed legislation
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Recommendation #2
Recommendation #2
Support legislation requiring an analysis of
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entire existing tax structure
•Sources of revenue available to localities limited
under Dillon Rule
•Current tax structure relies on real estate tax-
holdover from nineteenth century
•Tax structure needs to be more fair and
equitable among allcontributing parties
•Rather than deal piece-meal with a single tax
reform, entire tax structure needs to be
reevaluated
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Recommendation # 3
Recommendation # 3
Develop Streamlined Discount
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Proposal for Meals Tax information
filing
•Businesses can currently file sales tax
information with State electronically
•Would need to implement local
electronic filing to reduce burden and
encourage earlier filing
•Resource Assessments and Collections
System (January 2008)
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Recommendation # 4
Recommendation # 4
Continue to utilize task force process
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for future issues
•Encourages participation
•Allows all parties to be heard
•Provides opportunity to educate
•Opens productive dialogue
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