Law exempts non-profits from meals tax rules
By Nancy Lindsey
Gov. Terry McAuliffe signed House Bill 1099 Monday, which will exempt all non-profit organizations from collecting a meals tax at fund-raising events.
Monday was the deadline for the governor to take action on all legislation passed by the General Assembly during its regular session that concluded March 8.
The bill had already been passed by both the House of Delegates and the Senate.
House Bill 1099 was co-sponsored by Del. Charles Poindexter at the request of the Patrick County Board of Supervisors.
"The bill removes the limit of three events groups such as Veterans of Foreign Wars, fire, rescue and other non-profits can hold each year before having to charge meals, food and beverage taxes," Poindexter wrote in his weekly legislative column in February.
The current law related to meals taxes exempts "volunteer fire departments and rescue squads; non-profit churches or other religious bodies; or educational, charitable, fraternal, or benevolent organizations" from collecting the tax at fund-raising events such as Meadows of Dan's Pancake Days.
However, current law also includes the stipulation that these organizations cannot be exempt for more than three fund-raising activities per calendar year.
Many people have objected to that caveat in the meals tax referendums that the county held in 2012 and 2013.
The referendums were defeated four times in the past decade, but the three-event limit was only in effect for the past two ballot questions (due to a change in the law) and was considered a contributing factor in those defeats.
Some members of the board of supervisors have argued that the 4% meals tax--which primarily refers to meals served in restaurants--could be an important source of revenue for the county and would have little effect on county taxpayers.
The revenues generated by a meals tax have been estimated at around $200,000--more than the approximate $175,000 generated by one cent on the county's real estate levy.
The county tax would apply only to restaurants outside the town of Stuart, which already has a meals tax that generates about $250,000 annually.