Roanoke's treasurer cracks down on delinquent meals tax

ROANOKE, Va. (WDBJ7) -- Roanoke officials say local restaurants owe the city nearly $300,000 in unpaid taxes. It comes from the money you pay when you go out to eat.

The Roanoker has been in business for a long time.

"78 years," confirms Owner Butch Craft.

She said success is an easy recipe.

"Good food, fair prices," she said. "We try to keep the atmosphere nice."

They also try to keep up with their taxes owed to the city.

"We were late one month," Craft admits. "Because of circumstances, we just forgot to pay. And the penalty was high."

That's the standard Tresurer Evelyn Powers is trying to set.

"It's the law," said Powers.

Since her office took over trust tax collections a year and a half ago, she's run a tight ship.

"When I took the office of oath of treasurer, it says I will uphold my responsibilities," she said. "And that's just what I'm trying to do."

She's got reason for it, too.

Powers says local restaurants owe the city nearly $293,687.56 in unpaid food and beverage taxes, to include penalties and interest.

The inactive balance for unpaid food and beverage taxes, from restaurants no longer in business, is $98.654.35 as of Jan. 7, 2019.

Powers said she allows businesses two months to get things in order. A late payment includes a 10 percent penalty and a $35 charge for the return check fee.

"We want to help you," she said. "However, if you're not willing to help yourself and do what you need to do, my office cannot hold their hand."

Powers said trust taxes include meal taxes, lodging and admissions. About $14 million comes to the city each year in food and beverage taxes alone. That money is used to help run the city. About 40 percent of it goes to Roanoke City Schools, which is why Powers feels responsible for keeping up with collections. It's money the businesses are holding in trust for the city.

"So it's not your money. At the end of the day, it's not your money."

Plus, she and Craft agree, it's only fair.

"It's not right for us to pay and they don't pay," Craft said. "I mean, it's not a choice; you have to pay taxes."

"Some people, honestly what we hear, and they tell us they don't open their mail from us," Powers said. "So, if you don't pay attention to what we send you in the mail, it's just gonna build by each month, you're getting a penalty."

Powers said that of the 500 restaurants in the city, her office is working with about 40 of them to pay off their balance. Her office has already turned over four delinquent businesses to the Commonwealth's Attorney.

In fact, court records show the owners of Mel's Place, a pizza restaurant now closed, were recently indicted on charges of embezzlement, failure to pay meals tax and failure to report food charges.

"It's not an easy decision," Powers said. "I lose a lot of sleep at night."

But Powers says not following the letter of the law, would be a recipe for disaster.

"The treasurer's responsibility is to collect taxes," said Powers. "And while some of the decisions I have to make are not easy ones, if I don't do my job, then the city can't do their job to give the services to citizens that they are expecting to receive."

WDBJ7 attempted to contact the former owners of Mel's Place for comment on this story. Phone calls and messages to the owners were not returned.