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City enacts half-cent sales tax

CHARLESTON, W.Va. -- With just one dissenting vote Monday, City Council members approved a half-cent-per-dollar tax on retail sales in the city of Charleston.

Shoppers won't feel the pinch immediately, however. Although the tax ordinance is effective immediately, merchants won't start charging the tax until least October 1, city attorney Paul Ellis said.

Under state law, the state Tax Department must first notify all merchants about the new tax, and tax collections can't start until the first day of a calendar quarter at least 120 days after catalog vendors get the word.

The city's goal is to notify the Tax Department about passage of the tax, and supply required data about the city's boundaries by the end of the month so that the Tax Department can send out its notices in June, said Dale Steager, a former two-time acting state tax commissioner who is advising the city on the sales tax.

"A notice will go out, probably electronically, to vendors in Charleston and others in the state because they can make deliveries in Charleston, and to out-of-state vendors," Steager told members of council's Finance Committee.

"Our hope is to start collecting the first of October." But if there's a delay, the date could be pushed back to Jan. 1, 2014, he said.

Large vendors who file tax returns every month would probably pay their first city taxes on Nov. 20, Steager said. But because the state reimburses the city on a quarterly basis, the city would not get its first tax payment until February or March, Ellis said.

The state will also get a cut of the city sales tax, Ellis said, although the amount is still in the air because the Legislature changed the terms late in the session.

"Under existing state law they get 1 percent or actual costs [of administration], whichever is less," Ellis said. "But at the end of the session they revised the ceiling to 5 percent."

The state tax commissioner will draft a legislative rule to carry out the will of the Legislature, Steager said, which would likely get enacted through a rulemaking bill during the 2014 legislative session.

However, state officials have already mentioned a minimum figure, Ellis said.

"In the conversations we've had it would take about $200,000 to get up and running. That's the ballpark estimate," he said.

East End Councilman Robert Sheets, who cast the only vote against the measure, said the tax is regressive and hits low-income people the hardest. "I'd hope we could find other options."

Councilman Ed Talkington said he sympathized, but said cities have few options for raising money. "There's a user fee and a sales tax. Ideally we'd have another mechanism, but we don't."

Also Monday, council members unanimously passed a bill to eliminate the business and occupation tax on manufacturing within city limits. The tax change takes effect Jan. 1.

And council members bought vehicles for several city departments -- a $154,900 ambulance, a $102,001 dump truck and a $146,146 bucket truck.

Reach Jim Balow at balow@wvgazette.com or 304-348-5102.


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