A proposal issued by the City Manager's office last fall recommending a 33 percent increase to the Charlottesville meal tax is inciting controversy amongst local businesses.
The suggestion to increase the meal tax was proposed in fall 2002 along with several other methods of decreasing expenditures and accumulating more funds for government use.
"We also proposed several other ideas such as increasing the price of auto decals and reducing expenditures," City Manager Gary O'Connell said.
The meal tax currently is three cents per dollar. If the council votes in favor of the hike, the tax rate will be increased to four cents per dollar.
The meal tax only applies to food sold in restaurants, which also incur a state sales tax of 4.5 cents per dollar.
Members of the Virginia Hospitality & Travel Association, a statewide union of businesses, have said they feel the tax penalizes the residents of Charlottesville and the food industry.
"Taxing the food industry is very punitive," Travel Association Executive Vice President Danny Mitchell said. "We are not necessarily tourists, so why should we be taxed?"
Tourists used to be the target of the meal tax, but no longer constitute the majority of those who dine out, according to the National Restaurant Association, whose studies show 77 percent of restaurant business comes from local patrons, Mitchell said.
The Travel Association complains that revenue procured from the restaurants is not used to aid the restaurants, but allocated elsewhere.
"Taxes do not go to our industry," Mitchell said. "It goes to other causes, but the tax is being put on the back of our industry."
Of the revenue procured from the meal tax, 60 percent will go to the public school system. Council has not yet proposed how the remaining funds would be used.
The debate over taxes in Charlottesville is not restricted to the meal tax.
"There is debate about whether we should raise taxes at all," City Councilman Blake Caravati said.
Albermarle County currently has a four- cent meal tax. The proposed increase in Charlottesville would equal the county meal tax rate.
"We want to raise the tax an additional one cent per dollar to parallel Albemarle," Caravati said.
Travel Association members said they do not believe the city can both impose a living wage increase and an increase in taxes.
"It's fairly ironic that a city or county is trying to impose a living wage and at the same time they are increasing taxes for those they are increasing wages for," Mitchell said.
The City Council will debate the proposal Wednesday.
Caravati says he is confident the tax increase will not cause a decrease in customers at restaurants.
"It's not going to discourage anyone," he said.
Read More
Students have federal internship offers rescinded due to hiring freeze
By Nina Broderick | YesterdayUntil July 15, no presently vacant federal civilian positions may be filled, and no new positions may be created.
Man dies from self-inflicted gunshot wounds at the Rotunda
By Ford McCracken | 2 days agoThe investigation is ongoing, and additional details are not available at this time.
Virginia primary elections feature contested race for Democratic Lt. Gov. candidate
By Nicolas Biernacki | 2 days agoEligible voters can find more information about early voting by consulting the City Department of Voter Registration & Elections website or the County Department of Elections website.
