WEST virginia
legislature
2017 regular session
By
[
to the Committee on Political Subdivisions then Finance.
A BILL to amend the Code
of West Virginia, 1931, as amended, by adding thereto a new article, designated
§11-28-1, §11-28-2, §11-28-3,
§11-28-4, §11-28-5, §11-28-6,
§11-28-7 and §11-28-8, all relating to allowing counties and
municipalities to levy a sales tax on food and beverages sold at restaurants;
providing for county and municipality options; limiting the total tax to three
percent; limiting a municipal tax to two percent; setting forth the procedures
for counties or municipalities to use to impose the tax; requiring publication;
setting forth how the collected tax may be used; setting forth apportionment of
the tax between local jurisdictions; setting forth exemptions from the tax;
defining terms; and providing criminal penalties.
Be it enacted by the
Legislature of West Virginia:
That the Code of West
Virginia, 1931, as amended, be amended by adding thereto a new article,
designated §11-28-1, §11-28-2, §11-28-3,
§11-28-4, §11-28-5, §11-28-6,
§11-28-7 and §11-28-8, all to read as follows:
ARTICLE 28. LOCAL
OPTION FOOD AND BEVERAGE TAX.
§11-28-1. Food and beverage tax.
A county or municipality
is authorized to levy a tax on food and beverages sold for human consumption by
a restaurant as defined in this article.
Any tax levied under this
article may not exceed three percent of the gross amount charged for the food
and beverages.
§11-28-2. Definitions.
As used in this article:
"Alcoholic beverage" means any alcohol, beer, wine and spirits, and any
liquid or solid capable of being used as a beverage, including any beverage
that consists of a mixture of alcoholic and nonalcoholic liquids or solids.
"Beverage" means any alcoholic or nonalcoholic liquid intended
for human consumption.
"Fund-raising
organization" means any
church, school, fraternal or social organization, volunteer fire department or
rescue squad that periodically sells food and beverages for public consumption
to raise funds to benefit that organization.
"Municipal" or "municipality" means any city or town.
"Not-for-profit
capacity" means the sale of
food for the intentional purpose of equaling the operating costs of the
restaurant.
"Restaurant" means any place where food is prepared for service to
the public on or off the premises, or any place where food is served,
including, but not limited to, lunchrooms, food counters, food trucks or carts,
short order or fast food eateries, cafeterias, coffee shops, cafes, taverns,
delicatessens, dining accommodations of public or private clubs, kitchen
facilities of hospitals and nursing homes and dining accommodations of public
and private schools and colleges.
§11-28-3. County option.
(a) Any tax levied under
this article must be approved by referendum within the county in which the tax
is to be levied by a margin of at least sixty percent of those voting.
(b) A referendum for
imposition of a county food and beverage tax may be initiated by:
(1) A resolution of the
county commission; or
(2) A petition filed
with the county commission signed by a minimum of ten percent of the county's registered voters as of January 1 in the year in
which the petition is filed.
(c) A petition or
resolution may designate the length of time of the tax's imposition and the projects or purposes for which
the tax will be levied: Provided,
That the information is included on the referendum's ballot.
(d) The county
commission shall publish a Class III legal advertisement of the referendum in
compliance with article three, chapter fifty-nine of this code in a newspaper
of general circulation in the county.
§11-28-4. Collection of tax; use.
(a) Any tax levied
pursuant to section three of this article shall be collected in a manner prescribed
by the county commission.
(b) Any tax levied under
section three of this article shall be placed in the county's general revenue fund and expended as the county
commission desires: Provided,
That any projects or purposes designated for the imposition of the tax and
included on the referendum ballot shall be paid as follows:
(1) At least twenty-five
percent or such greater portion of the collected tax as may be agreed between
the county commission and the county's
economic development authority prior to the publication required by subsection
(d), section three of this article shall be remitted by the county to the
county's economic development
authority to be expended for economic development purposes;
(2) For all restaurants
located within a municipality, at least twenty-five percent or a greater
portion of the collected tax from each restaurant as may be agreed between the
county commission and the municipality shall be remitted by the county to the
municipality to be expended in a manner which the municipality's governing body desires.
§11-28-5. Municipal option.
(a) Any municipality
located in a county that has not levied, or sought to levy, a food and beverage
tax within one year following the effective date of this article, is authorized
to levy a tax on food and beverages sold for human consumption by a restaurant
as defined in this article. Any tax
levied under this article may not exceed two percent of the gross amount
charged for such food and beverages.
(b) Any tax levied under
this article must be approved by referendum within the municipality in which
the tax is to be levied by a margin of at least sixty percent of the voters who
vote in the referendum.
(c) A referendum for
imposition of municipal food and beverage tax may be initiated by:
(1) A resolution of the
municipality's governing body; or
(2) A petition filed
with the municipality's governing
body signed by a minimum of ten percent of the municipality's registered voters as of January 1 in the year in
which the petition is filed.
(d) A petition or
resolution may designate the length of time of the tax's imposition or projects or purposes for which the tax
will be levied: Provided, That
the information is included on the referendum's ballot.
(e) The municipality's governing body shall publish a Class III legal
advertisement of the referendum in compliance with the provisions of article
three, chapter fifty-nine of this code in a newspaper of general circulation in
the municipality.
§11-28-6. Exemptions.
(a) This tax is
applicable to restaurants whose food and beverage preparation and service are
regulated by county boards of health.
Any tax levied under this article may not be levied upon food and
beverages sold from:
(1) Places manufacturing
packaged or canned foods which are distributed to grocery stores or other
similar food retailers for sale to the public;
(2) Vending machines;
(3) Restaurants
operating in a not-for-profit capacity;
(4) Churches serving
meals as a regular part of regular religious observances;
(5) Fund-raising
organizations; or
(6) Food counters or
delicatessens that operate as part of a larger retail business which:
(A) Food and beverage
sales do not exceed thirty percent of the larger retail business's total gross sales; and
(B) Have ten or fewer
seats on the premises at which food is consumed.
(b) Any tax levied
pursuant to this article may not be applied to any discretionary gratuity paid
by the purchaser in addition to the sales price, nor to any mandatory gratuity
or service charge added by the restaurant to the sales price that does not
exceed twenty percent of the sales price.
§11-28-7. Wrongful and fraudulent use of funds;
penalty.
All food and beverage
tax collections are considered in trust for the county or municipality imposing
the applicable tax. The wrongful and
fraudulent use of the proceeds other than remittance to the county or
municipality as provided by this article constitutes embezzlement pursuant to
section twenty, article three, chapter sixty-one of this code and is subject to
the criminal penalties of that section.
§11-28-8. Apportionment.
If a business is located
partially within two or more local jurisdictions because of a boundary line
that passes through the place of business, and one or more of the local
jurisdictions imposes the food and beverage tax, the tax rate of each
applicable local jurisdiction shall be apportioned between the local
jurisdictions. The apportionment shall
be based upon the area in the political subdivision which the place of business
actually occupies and actively uses in connection with the business.
NOTE: The purpose of this bill is
to allow local governments to levy a sales tax on food and beverages sold at
restaurants. The bill providing for county and municipality options. The bill
limits the total tax to three percent. The bill limits a municipal tax to two
percent. The bill sets forth the procedures for counties and municipalities to
use to impose the tax. The bill requires publication. The bill sets forth how
the collected tax may be used. The bill sets forth apportionment of the tax
between local jurisdictions. The bill sets forth exemptions from the tax. The
bill defines terms. The bill provides criminal penalties.
Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.