RICHMOND, Va. -- As proposed bills to address the issue make their way through the General Assembly, the City of Richmond has taken its first regulatory steps to change its tax collection practices that in recent years have plagued restaurant owners in particular.
City Council on Monday approved an ordinance amending city code to allow tax payments to be applied to the month they are made, rather than applying them first to delinquent balances as is currently required by a state law.
The practice has resulted in a snowball effect in which tax payments are put toward unknown penalties, leaving only part of the balance paid and racking up additional penalties without notice to the taxpayer. For restaurant owners making meals tax payments, the practice in some cases has produced tax bills amounting to tens or even hundreds of thousands of dollars owed to the city.
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