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HomeMy WebLinkAbout090506 Meals TaxMEALS TAX TASK FORCE MEALS TAX TASK FORCE REPORT REPORT September 5, 2006 September 5, 2006 1 Meals Tax Task Force Members Meals Tax Task Force Members Robert M Dyer -Sanford Cohen- ?? CouncilmanVirginia Beach Central Business District Ron A Villanueva - ? CouncilmanStephen Romine- ? Chamber of Commerce Delegate John Welch- ? Virginia House of DelegatesPatricia A. Phillips- ? Director of Finance Chris Savvides- ? Virginia Beach Restaurant AssociationRita Sweet Bellitto- ? Virginia Beach School Board Hu Odom - ? Virginia Beach Restaurant AssociationBill Brown- ? Minority Business Council Flo McDaniel- ? Virginia Beach Restaurant Philip Kellam- ? AssociationCommissioner of the Revenue Mike Standing-Dave Hansen- ?? Virginia Beach Restaurant AssociationChief of Finance & Technology Jerry Bryan-Bunk Abey- ?? Virginia Beach Restaurant AssociationFinancial Analyst Mike Kreider-Julia CiarloHammond- ?? Virginia Beach Hotel/Motel AssociationVirginia Hospitality and Travel Association 2 Meals Tax Task Force Charge Meals Tax Task Force Charge Study impacts of current meals tax on ? citizens and restaurant community Compare City’s meals tax to other cities in ? region, state, and nation Identify City ordinances or policies that set ? aside meals tax proceeds for specific purposes Determine effect of meals tax on special ? tax districts and school revenue sharing Analyze effects on revenue of repealing all ? or portion of meals tax 3 Meals Tax Task Force Major Findings Meals Tax Task Force Major Findings Meals tax revenue has risen in City and throughout ? 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 ? 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), ? Major Projects (.56 cent), Open Space (.44 cent); General Fund (3.5 cents) Meals tax has no direct effect on special tax districts ? or school revenue sharing No readily identifiable source of revenue replacement ? was identified if meals tax reduced 4 Recommendation #1 Recommendation #1 Support legislation to require referendum ? 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 5 Recommendation #2 Recommendation #2 Support legislation requiring an analysis of ? 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 6 Recommendation # 3 Recommendation # 3 Develop Streamlined Discount ? 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) 7 Recommendation # 4 Recommendation # 4 Continue to utilize task force process ? for future issues •Encourages participation •Allows all parties to be heard •Provides opportunity to educate •Opens productive dialogue 8