Richmond about a year from new online meals tax portal
CAO Lincoln Saunders says a ‘handful’ of city restaurants have been affected by recent collection issues.
As the city responds to criticism of how it taxes restaurants and notifies them of late payments, Chief Administrative Officer Lincoln Saunders addressed the media during a streaming press conference Thursday.
Latitude Seafood Co., which has two locations in the Richmond area and one in Maryland, and Philly Vegan in Manchester took to social media recently to air their grievances with the city’s finance department. Additional restaurateurs have since come forward.
The CAO said the city’s “dealing here with a handful of cases that have kind of worked their way through the review and appeals process, haven't been resolved and are where they are.”
Owners of some establishments said they received inaccurate information about the meals tax, leading to tens of thousands of dollars being due to the city of Richmond. The city has said it intends to work with some of the restaurant owners who have been affected.
To address the issue, Saunders described RVAPay, a new online payment system that will continue rolling out this year. The city has already enabled the payment of personal property taxes through the system, he said. And by the end of 2024, real estate and lodging tax payment portals are expected to be up and running.
Meals tax payments also could be ready by the end of the year.
“Having an online portal that's accessible for businesses, I think, is just a 21st-century step the city needs to take,” Saunders said. “We have been working on that for more than the last two years. It's been a stated priority of the mayor, of the finance team, myself to get to a 21st-century technology for our finance department.”
City Council President Kristen Nye recently told VPM News that the new meals tax payment system would improve communications and transparency.
“We want to support our small business,” Nye said. “We also rely on the meals tax as a kind of revenue. We just need this to function in a more healthy manner.”
Saunders also pushed back Thursday on the idea that the city’s finance department doesn’t send notices to restaurants if they’re delinquent in paying meals taxes. Each month, city restaurants pay a self-reported tax of 7.5% that’s used to support public schools. If that payment is late, it accrues a 10% penalty.
Philly Vegan co-owner Samuel Veney said after opening in summer 2021, he was not notified until April 2022 that he owed the city money.
Saunders said there was a pandemic-related lapse in notifications.
“July 2022 was when both the finance department and council [and] the city felt like, ‘All right, we are far enough into this pandemic that we really do need to get back to our normal practices,’” he said.
Mayor Levar Stoney, who hasn’t publicly answered questions on the meals tax issue this week, held a separate media event Thursday to discuss the city’s legislative priorities for the upcoming General Assembly session.
In response to a question on the tax, Stoney referred reporters to the overlapping meeting with Saunders.
“There's responsibility on the business’ side and on the government side as well. At the end of the day, we want this to be a great place for people to start their business, to run their business,” Stoney said, while declining to comment specifically on restaurant owners’ claims. “We recognize that small businesses are the backbone, the middle bone and the front bone of this economy. And we want to keep it that way.”
Are you a Richmond restaurant owner who has experienced meals tax penalties and is willing to speak with VPM News? Reach out: [email protected].