RICHMOND, Va. -- After consulting with the city attorney, Chief Administrative Officer Lincoln Saunders said that Richmond will be able to provide businesses credits for incorrectly charged meals tax if they find it was because of lack of notification or because of the compounding situation.
Saunders made clear that this will only be on a case-by-case basis and to the extent the law allows.
The announcement came as he sat down with a group of business owners Wednesday night for a meeting to answer questions and address concerns.
The issue at hand is over the mishandling of meals tax collection of city restaurants.
Councilwoman Ellen Robertson called the meeting to have Chief Administrative Officer Lincoln Saunders address ongoing concerns.
“I acknowledge there is a lot of things the city could have handled in a better way and we’re working to try to make things right. I don’t want to make excuses I just want to make it right,” he said.
Saunders said the city did not break the law - but did not follow best practices in communicating the change in how the meals tax was collected from businesses.
Businesses were not notified of missed payments, an action that resulted in the compounding of penalties and late fees, according to Saunders.
When asked if businesses would have their delinquent balances wiped if it was because of the compounding due to lack of notification, Saunders said they would to the extent of the law.
“We are going to work to return, we will go case by case but as we do that and we can justify it as being tied to timely notification, or compounding factor I think we should be able to provide credits to these businesses,” he said.
However, Saunders acknowledged this process would not be quick.
His office estimates at least 500 businesses could have been impacted to various degrees over the years, and that the city's current financial system is outdated, factors that will make the process time-consuming and intricate.
Saunders said that the current system does not allow them to pull a single report and said changing the system to increase efficiency is also not a quick fix.
As a result, the city shared it will be reviewing each case manually.
The city council will also vote in the coming weeks to change the law to ensure this doesn’t happen again.
They are proposing amending the city code to allow the city to separate delinquent accounts and current accounts.
Saunders shared how the city has also revised operation procedures and the notification process and has added staff to help work through these issues
“The thing that concerns me across the board is that the city doesn’t care. We do and we have to get better,” he shared.
The city has now created two ways for impacted businesses to reach them for concerns about this issue.
You can email mealstax@rva.gov or you can fill out a form, here.
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