Despite anticipation of a steep drop off due to the COVID-19 pandemic, the Town of Vienna has managed higher revenue on its meals tax than expected.
The meals tax generated 80% revenue for the first month of the new fiscal year, July, compared to last year. During pre-pandemic months, the monthly average for meals tax was $250,000, while July’s revenue came in at $194,000.
While there have been concerns for lower meals tax through the upcoming colder months, the generated revenue has left the town “pleasantly surprised,” according to finance director Marion Serfass. In preparation for a steeper drop off, the town budgeted for 50% of the pre-pandemic revenue.
Since March, five restaurants in the town have either moved or closed, while only one has reopened.
A contributing factor for the steady meals tax has been the stable business for drive-thru and high-end restaurants. During the pandemic months, there has been “no noticeable” drop off for drive-thru restaurants compared to previous meals tax revenue. The assumption for the trend is that people feel safer utilizing drive-thru restaurants, according to Serfass.
The meals tax revenue — a 3% tax on each meal sold — is used to pay back bonds issued for capital improvement projects.
Though the revenue has been higher than expected and the town is gradually recovering from the effects of the pandemic, there are still concerns about how local businesses may be affected by the pandemic if it stretches into next year.
In a discussion on Tuesday with Vienna Mayor Linda Colbert, and various business and economic leaders, Town Economic Development Manager Natalie Monkou cautioned that businesses might need to adjust to the ongoing health crisis.
“We’re anticipating the health crisis to continue into 2021 and we want to be able to help our business community pivot,” Monkou said.
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No Car Decals in This Fall’s Tax Bills — “Falls Church Treasurer Jody Acosta reported to the F.C. City Council Tuesday that the personal property tax bills being issued this fall will not, as in the past, include decals to be placed on car windshields.” [Falls Church News-Press]
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The Vienna Town Council has new measures to help businesses and residents struggling financially due to the coronavirus pandemic.
Last night (Monday), the council approved extending the deadline for real estate taxes, along with changing the town’s meal tax provision, according to a town press release.
“Even though the Town has its own significant, pandemic-related financial impacts to address, Town Council wants to make what temporary changes it can to assist our restaurants and property owners,” Mayor Laurie DiRocco said in the press release.
Now, the first 2020 installment of real estate taxes in the town will be due on Aug. 28. Fairfax County’s Board of Supervisors also extended its real estate tax deadline to August.
As for the meal tax, the town adopted an emergency ordinance that will be in effect from April 14 to June 13, the press release said.
“For the next 60 days, through June 13, the Town will waive any penalty and interest fees for late payments. In addition, the Town will increase the on-time payment discount from 3% to 10%,” the press release said, adding that restaurants pay collect meal tax payments from diners to the town.
The Fairfax County Board of Supervisors approved today (Tuesday) giving taxpayers more time to file and pay their taxes.
Now, individuals and businesses in the county will have until June 1 to file their personal property tax returns. Additionally, the first half of payments for real estate taxes won’t be due until Aug. 8.
“Both these resolutions are intended to alleviate the negative impact threatened by the potential spread of COVID-19,” according to county documents.
“I’ve been asked a lot about this since a lot of folks in the county have found themselves without paychecks,” Chairman Jeff McKay said.
McKay said that people won’t accrue late fees for following the new deadlines.
By pushing the deadlines, the county will likely be delayed in receiving tax revenue, according to the county. However, county staff said that the benefits to the community by pushing the deadlines outweighs potential impacts on revenue.
The Fairfax County Board of Supervisors kicked off its first meeting in 2020 by voting to support equal taxing authority.
Yesterday (Tuesday), Chairman Jeffrey McKay and Braddock District Supervisor James Walkinshaw jointly proposed asking the General Assembly to support equal taxing authority.
Currently, counties have less taxing authority than cities and towns in Virginia.
“The local tax structure in Virginia has become outdated, and limitations on counties’ ability to raise revenues from diverse sources has resulted in an over-reliance on property taxes to fund core local government programs and services,” according to the board matter from McKay and Walkinshaw.
McKay and Walkinshaw argue that counties would be able to invest more in education, transportation, public safety and human services with equal taxing authority.
“Virginia relies more on local taxes and revenues for funding government services than most other states,” the board matter says. “Relying too heavily on one source of revenue leaves counties vulnerable to downturns in the real estate market and population shifts.”
The Virginia Association of Counties (VACo) has been pushing for equal taxing authority for the 2020 General Assembly session. Montogomery County’s board recently voted to support equal taxing authority.
“Having served on the VaCo board for a number of years, this is one of the few issues that we can truthfully say has overwhelming support from virtually every county in the Commonwealth of Virginia,” McKay said before the vote.
Springfield District Supervisor Pat Herrity — the only Republican on the Board of Supervisors — disagreed.
“It does not have overwhelming support in the Springfield District,” Herrity said. “I think what we have is more of a spending problem than a revenue problem.”
The board voted 9-1, with Herrity voting “no,” to support the proposal.
Just days before the deadline, Congress passed legislation benefiting small liquor distilleries by extending a tax break that was set to expire on Dec. 31, 2019.
The tax break legislation was first passed in 2017 and only originally guaranteed a decrease through the end of 2019.
But, instead of indefinite decrease that groups like the American Craft Spirits Association were hoping for, the tax decrease was simply extended for another year — until Dec. 31, 2020.
The Craft Beverage Modernization and Tax Reform Act lowered the Federal Excise Taxes (FET) for owners of distilleries from $13.50 to $2.70 per gallon — allowing business owners to reinvest that money by expanding their ventures and hiring more staff.
“Though FET permanence is critical to the long-term success of our industry and the peripheral industries we support, including U.S. agriculture and hospitality, today we celebrate a small but critical victory,” Margie Lehrman, the CEO of ACSA, said in the press release.
According to a survey by Forbes of 100 members of the ACSA, half of the respondents said that they would have made staffing cuts if the taxes had risen. Others said that they would have cut production, increased prices or halted expansion to compensate for the tax rise.
Michael Paluzzi, the owner of Falls Church Distillers, said in a previous interview with Tysons Reporter that the tax break allowed him to hire new employees and expand his prospects for growth past NoVA into surrounding areas.
Paluzzi had been working with ACSA since July to push lawmakers for a permanent tax decrease. He originally told Tysons Reporter that though he was hoping that Congress would permanently lower the tax, he was also aware that this outcome was a possibility.
The renewal of the lower tax rate was packaged with other legislation, allowing it to be fast-tracked before it expired.
“Tomorrow, we will again shift gears to focus on permanent tax relief and long-term parity with our friends in craft beer and wine,” Lehrman said.
Photo via Dylan de Jonge/Unsplash
A tax reduction for small distilleries across the country is about to expire on Dec. 31 — potentially leaving local businesses like the Falls Church Distillers uncertain of the future.
Earlier this year, Michael Paluzzi, the owner of the Falls Church Distillers, attended a conference and petitioned members of Congress to pass a bill that would freeze taxes on hard liquor at $2.70 per gallon rather than allowing them to rise to $13.50 per gallon.
The bill garnered 16o Republican cosponsors and 166 Democratic cosponsors, but ultimately did not inspire a legislative change.
Paluzzi said he is disappointed that his efforts with the American Craft Spirits Association didn’t get more support from Virginia politicians.
“We just don’t seem to muster their support for whatever reason,” he said. “The logic escapes me.”
As the looming tax increase approaches in three weeks, Paluzzi said he is preparing to downgrade his dreams of expansion and will focus on fostering his current market in the Virginia, D.C. and Maryland areas, instead of expanding to new states.
For now, many small distillery owners are just trying to stay afloat, Paluzzi said, adding that they will not be able to hire new employees or expand their markets like many planned.
Though he keeps up with newsletters and peers, Paluzzi said he isn’t in contact with people on Capitol Hill.
“Not hearing anything is always a scary thing,” he said.
Photo via Falls Church Distillers/Facebook
The Fairfax County Board of Supervisors is set to hold a public hearing about a real estate tax exemption involving disability income tomorrow (Tuesday).
Fairfax County currently provides income-based real estate tax relief to homeowners based on income and disability.
A revision to the Virginia Code in July now allows localities to exclude the disability income of disabled relatives living in a taxpayer’s home from the total combined income calculation.
The proposal before the Board of Supervisors would codify that exemption for taxpayers in Fairfax County.
County staff has said the tax change could “potentially [expand] the number of properties that qualify for tax relief.”
More from Fairfax County:
The total amount of relief resulting from this amendment is difficult to estimate because the Department of Tax Administration cannot precisely determine how many individuals will apply and qualify under the revised calculation. It is anticipated that the fiscal impact will be minor.
The public hearings start at 3 p.m. and the tax one is set to start around 4 p.m.
If approved, the change would go into effect on Jan. 1.
Photo via Fairfax County/Facebook
Car Tax Due Today — Fairfax County “mailed more than 800,000 annual bills to vehicle owners, and because Oct. 5 falls on a Saturday, this year’s deadline to pay [the] bill is Monday, Oct. 7.” [Fairfax County]
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Art Around Tysons Metro Stations — “Public art not only adds beauty to a place, it can also help people orient themselves and find their way around. Tysons is no exception… Let’s take a look at four public art pieces at Metro stations in Tysons.” [Greater Greater Washington]
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The City of Falls Church mayor is fighting a federal tax law change that he warns will put a strain on local residents.
In December 2017, Congress passed a new law that limits the amount of state and local taxes (SALT) that people can deduct from their federal income tax return to $10,000.
Known as the SALT deduction cap, this law has stirred up controversy.
Some people claim it puts people in areas with a higher cost of living at a disadvantage because they will likely pay more in taxes, while others say that SALT deductions disproportionately benefit a small proportion of wealthy taxpayers.
Tarter said he is one of a few politicians across the country that are spearheading an effort to reverse the decision or minimize the damage they say it will have on their communities in the near future.
“The new cap on the SALT deduction double taxes citizens on these payments and penalizes workers in high-cost areas, like my city, where wages and income are high but are fully matched by the cost of living,” Tarter told the committee, adding that the new law takes away more tax dollars from the city.
Falls Church City Manager Wyatt Shields, who manages the city’s finances, told Tysons Reporter that Falls Church residents spend more on housing comparative to anyone else in the country. He added that this new legislation only “exacerbates” the city’s lack of affordable housing.
According to Tarter’s statement to the committee, the median home price in the city is around $825,000 — “That doesn’t buy you a mansion but likely a modest brick rambler built in the 1950s.”
That median home price is drastically more than the $229,000 median home price across the U.S., according to Zillow.
“I’ve heard from a fair amount of people how their taxes have gone up and not at first realized implications,” Tarter told Tysons Reporter while talking about the fallout from the law.
The Internal Revenue Service (IRS) announced Wednesday, Aug. 14, that they will waive the tax underpayment penalty for more than 400,00 people who did not claim a special penalty waiver when they filed their federal income tax returns this year.
“Earlier this year, the IRS lowered the usual 90% penalty threshold to 80% to help taxpayers whose withholding and estimated tax payments fell short of their total 2018 tax liability,” according to an IRS press release.
Locally, this may help residents in the Northern Virginia area who were hit with unforeseen financial burdens recently because of the SALT deduction cap.
“There are no yachts in Falls Church, just lots of hard-working families trying to get by in the high-rent district,” Tarter said. “Most of the folks that I know are two-income families who serve their country through work in government or the military and want the best education possible for their children.”
Ultimately, Tarter hopes that the SALT deduction cap, currently sitting at $10,000 per household, is heightened or eliminated entirely.
“The next steps are up to Congress,” Tarter said. “I suspect, given the way things are right now, there probably won’t be any immediate action.”
Image via C-Span