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HomeMy Public PortalAbout1986_06_25_O030 - Amending the TC to add a Meals TaxLeesb~rg in ~Zirgini~ ORDINANCE NO. AN ORDINANCE: PRESENTED June 25, 1986 86-0-30 ADOPTED June 25, 1986 AMENDING THE CODE OF THE TOWN OF LEESBURG, VIRGINIA, AS AMENDED, BY THE ADDITION OF ARTICLE IV "MEALS TAX" TO CHAPTER 17, "TAXATION AND LICENSES" IN ORDER TO IMPOSE A TAX ON PREPARED FOODS SERVED IN RESTAURANTS OR ELSEWHERE AND BY CATERERS WHEREAS, the Town of Leesburg under §3-1 of its Charter and §15.1-841, Code of Virginia (1950), as amended, is authorized to enact taxes on property and other lawful subjects as in the judgment of the Town Council are necessary to pay the debts, defray the expenses, accomplish the purposes and perform the functions of the town; and WHEREAS, under §58.1-3840, Code of Virginia (1950) as amended, and the aforesaid authority, the town is authorized to levy a tax upon prepared food consumed within the town; and WHEREAS, this Council deems the levy of such a tax on prepared food necessary to pay the debts, defray the expenses, accomplish the purposes and perform the functions of the town; and WHEREAS, a public hearing was held on June 11~ 1986 as required by the Town Code: THEREFORE, ORDAINED by the Council of the Town of Leesburg in Virginia as follows: SECTION I. The Town Code is amended by adding an article to be numbered Article IV, which said article reads as follows: ARTICLE IV - MEALS TAX Section 17-95. Definitions. For the purposes of this article the following words or phrases shall have the meanings respectively ascribed to them by this section: Caterer. A person who furnishes meals on the premises of another, for compensation. -2- AMENDING THE CODE OF THE TOWN OF LEESBURG BY THE ADDITION OF ARTICLE IV "MEALS TAX" TO CHAPTER 17, "TAXATION AND LICENSES, IN ORDER TO IMPOSE A TAX ON PREPARED FOOD SERVED IN RESTAURANTS OR ELSEWHERE AND BY CATERERS Director of Finance. The Director of Finance of the Town of Leesburg and any of his duly authorized agents. Meals. Any prepared food and food and drink,including alcoholic beverages offered or held out for sale by a restaurant or caterer for the purpose of being consumed by an individual or group of individuals along with prepared food at one time to satisfy the appetite. All such food and food and drink shall be included, whether intended to be consumed on the seller's premises or elsewhere, whether designated as breakfast, lunch, dinner, supper or by some other name, and without regard to the manner, time or place of service. Restaurant. Any place or thing in the town from which or in which meals are sold, including but not limited to places of business known as bars, cafes, cafeterias, coffee shops, clubs, delicatessens, diners, dining rooms, eateries, grills, lunch counters, restaurants, snack bars, grocery stores, convenience stores, vending machines and places where vending machines are located. "Restaurant" also means push carts or other mobile facilities from which meals are sold or furnished. Seller. Any person, including a restaurant owner and caterer, who sells or offers for sale a meal, and who is required to have a restaurant operator's permit issued by the Loudoun County Department of Environmental Health. Section 17-96. Levy of Tax. In addition to all other taxes and fees of any kind now or hereafter imposed by law, a tax is hereby imposed and levied on each and every purchaser of each and every meal served, sold or delivered in the town by a restaurant or caterer at the rate of two percent of the amount paid for the meal. There shall be no tax if the total amount paid is fifty cents or less; on larger amounts a fractional cent of tax due shall be rounded to the next higher cent. Section 17-97. Payment and collection of tax. The tax shall be collected by the seller and paid by the purchaser at the time the charge for the meal becomes due and payable, whether payment is to be made in cash or on credit by means of a credit card or otherwise. The seller shall add the tax to the amount charged for the meal, and shall pay the taxes collected to the town as provided in this article. Section 17-98. Collections in trust for town. Ail amounts collected by the seller as taxes under this article shall be deemed to be held in trust by the seller collecting them until remitted to the town as provided by this article. -3- AMENDING THE CODE OF THE TOWN OF LEESBURG BY THE ADDITION OF ARTICLE VI "MEALS TAX" TO CHAPTER 17, "TAXATION AND LICENSES, IN ORDER TO IMPOSE A TAX ON PREPARED FOOD SERVED IN RESTAURANTS OR ELSEWHERE AND BY CATERERS Section 17-99. Reports and remittances. The Director of Finance shall require all prospective sellers of meals licensed to do business in the town to register for collection of the tax imposed by this article. Every seller shall make a report to the town for each calendar quarter, showing the amount of charges collected for meals and the amount of tax required to be collected. The quarterly reports shall be made on forms prescribed by the Director of Finance and shall be signed by the seller. The report shall be delivered to the Director of Finance on or before the twentieth day of the calendar month following the quarter being reported. Each report shall be accompanied by a remittance of the amount of tax due, made payable to the town. Section 17-100. Discount. For the purpose of compensating sellers for the collection of the tax imposed by this article, every seller shall be allowed five percent of the amount of the tax due and accounted for in the form of a deduction on his or her quarterly return; provided, the amount due is not delinquent at the time of payment. Section 17-101. Penalty and interest. If any person whose duty it is to do so shall fail or refuse to make the report or remit the tax required by this article within the time and in the amount required, there shall be added to the tax by the Director of Finance a penalty in the amount of ten percent of the tax, and interest thereon at the rate of ten percent per annum, which shall be computed upon the tax and penalty from the date such were due and payable. Section 17-102. Procedure when tax not reported or collected. If any person whose dulty it is to do so shall fail or refuse to collect the tax imposed under this article and make timely report and remittance thereof, the Director of Finance shall proceed in such manner as is practicable to obtain facts and information on which to base an estimate of the tax due. As soon as the Director of Finance has procured whatever facts and information may be obtainable, upon which to base the assessment of any tax payable by any person who has failed to collect, report or remit such tax, the Director of Finance shall proceed to determine and assess against such person the tax, penalty and interest provided in this article, and shall notify the person by registered mail sent to his or her last known address, of the amount of such tax, penalty and interest. The total amount thereof shall be payable ten days after the date such notice is sent. Section 17-103. Preservation of records. It shall be the duty of every person liable for collection and remittance of the taxes imposed by this article to preserve for a period of two years -4- AMENDING THE CODE OF THE TOWN OF LEESBURG BY THE ADDITION OF ARTICLE IV "MEALS TAX" TO CHAPTER 17, "TAXATION AND LICENSES, IN ORDER TO IMPOSE A TAX ON PREPARED FOODS SERVED IN RESTAURANTS OR ELSEWHERE AND BY CATERERS records showing all purchases taxable under this article, the amount charged the purchaser for each such purchase, the date thereof, the taxes collected thereon and the amount of tax required to be collected by this article. The Director of Finance shall be authorized to examine such records at reasonable times and without unreasonable interference with the business of such person, for the purpose of administering and enforcing the provisions of this article and to make transcripts of all or any parts thereof. Section 17-104. Duty of person going out of business. Whenever any person required to collect and remit to the town any tax imposed by this article shall cease to operate or otherwise dispose of his or her business, the tax shall immediately become due and payable, and the person shall immediately make to the Director of Finance a report and remittance thereof. Section 17-105. Advertising payment or absorption of tax prohibited. No seller shall advertise or hold out to the public in any manner, directly or indirectly, that all or any part of a tax imposed under this article will be paid or absorbed by the seller or anyone else, or that the seller or anyone else will relieve any purchaser of the payment of all or any part of the tax. Section 17-106. Tips and service charges. Where a purchaser provides a tip for any employee of a seller, and the amount of the tip is wholly in the discretion of the purchaser, the tip is not subject to the tax imposed by this article, whether paid in cash to the employee or added to the bill and charged to the purchaser's account, provided, in the latter case, the full amount of the tip is turned over to the employee by the seller. An amount or percentage, whether designated as a tip or a service charge, that is added to the price of a meal by the seller, and required to be paid by the purchaser, is a part of the selling price of the meal and is subject to the tax imposed by this article. Section 17-107. Exemptions. The following classes of transactions involving meals shall not be subject to tax under this article: (a) Meals furnished by restaurants to employees as part of their compensation when no charge is made to the employee. (b) Meals sold by public or private elementary or secondary schools to their students or employees. -5- AMENDING THE CODE OF THE TOWN OF LEESBURG BY THE ADDITION OF ARTICLE IV "MEALS TAX" TO CHAPTER 17, "TAXATION AND LICENSES, IN ORDER TO IMPOSE A TAX ON PREPARED FOODS SERVED IN RESTAURANTS OR ELSEWHERE AND BY CATERERS (c) Meals furnished by a hospital, medical clinic, convalescent home, nursing home, home for the aged, infirm or handicapped or other extended care facility to patients or residents thereof. (d) Meals furnished by a non-profit charitable organization to elderly, infirm, handicapped or needy persons in their homes or at central locations. (e) Meals sold by a non-profit educational, religious, charitable or benevolent organization on an occasional basis as a fund-raising activity. <f) Any other sale of a meal which is exempt from taxation under the Virginia Retail Sales and Use Tax Act, or administrative rules and regulations issued pursuant thereto. Section 17-108. Enforcement. (a) It shall be the duty of the Director of Finance to ascertain of every seller in the town, liable for the collection of the tax imposed by this article, who fails, refuses or neglects to collect such tax or to make the reports and remittances required by this article. The Director of Finance may have issued a summons for such person, and the summons may be served upon such person by any town police officer in the manner provided by law and the Director of Finance may seek a conviction or other civil remedy, including injunction, against such person. (b) In the event the purchaser of any meal refuses to pay the tax imposed by this article, the seller may call upon the police department for assistance; and the investigating officer may, when probable cause exists, issue the purchaser a summons returnable to the general district court as provided by law. Section 17-109. Violations. It shall be unlawful and constitute a misdemeanor for any person to violate any of the provisions of this article. Any conviction or violation of any of the provisions in this article shall be punishable by a fine of not less than ten dollars ($10.00) nor more than five hundred dollars ($500.00), or imprisonment for up to thirty (30) days, or both. Each day any such violation of the provisions of this article shall continue constitut~ a separate offense. -6- AMENDING THE CODE OF THE TOWN OF LEESBURG BY THE ADDITION OF ARTICLE IV "MEALS TAX" TO CHAPTER 17, "TAXATION AND LICENSES, IN ORDER TO IMPOSE A TAX ON PREPARED FOODS SERVED IN RESTAURANTS OR ELSEWHERE AND BY CATERERS Section 17-110. Regulations. The Director of Finance may issue regulations for the administration and enforcement of this article not in conflict with this article. SECTION II. The provisions of this article are hereby declared to be severable. If any clause, sentence, section or part of this ordinance shall for any reason be adjudged to be invalid, such invalidity shall not affect the parts which are not adjudged to be invalid. All prior ordinances and resolutions in conflict herewith SECTION III. are repealed. SECTION IV. PASSED this This ordinance shall become effective January 1, 1987. 25th day of June , 1986. Robert E. Sevil~~' Town of Leesburg ATTEST ..