ROANOKE, Va. (WDBJ7) - Every time you go out to eat, part of your bill is money that should go directly to the City. But as WDBJ7 has been investigating, more than 60 businesses in the city are considered delinquent on making payments.
In her most recent report, Treasurer Evelyn Powers says delinquent businesses owe Roanoke City $251,062 in food and beverage taxes including penalties and fees.
She says most of the delinquent businesses get into trouble when a customer's money goes straight to operating costs, and not in a separate account for the city. That's landing some in legal trouble.
Back in January, we met with Powers who, by the power of the law, was recently given the responsibility of enforcing meals tax collection. It was a responsibility once held by the Commissioner of the Revenue.
"We're getting right on it," she had told us.
She has been making sure the money destined for city coffers actually makes it to the City.
But Powers said many businesses got behind on payments, and at least one was indicted for embezzlement and failure to pay.
Mel's Place eventually made a plea agreement with city prosecutors, and is expected to pay their debts in full later this month in exchange for a lesser, misdemeanor charge.
After our story in January showed more than 60 delinquent businesses owned nearly $300,000, city staff said it got the attention of the local eateries.
"It was, you know, we saw this on TV, you know we wanna make sure that we don't get in that position," said, Terra Heavner, Chief Deputy Treasurer.
But now, Powers said Thursday, there are still some who struggle to pay.
"You know since that's kind of calmed down a little bit," she said, 'we've seen people kind of sliding back again."
Her most recent list shows more than 60 businesses owe a total of $251,000. And a total of six businesses, including Mel's Place, have been turned over to the Commonwealth's Attorney's Office, which is new to this kind of prosecution.
"Prior to that to my knowledge," Joshua Dietz said of Mel's Place, "we had not prosecuted a meals tax case before."
Dietz, assistant Commonwealth's Attorney, said two of the five new business turned over to his office are being considered for indictment. Many of the others, he notes, are making their payments.
“It’s a moving target. It’s every month," Powers said. "So unless we can get everybody to come in and pay everything 100 percent, all at once, we struggle with getting that debt down. So it’s important that my staff, our collectors stay on top of using our tools to do the collections."
While the offices are working to streamline that process, they hope precedent sends a message.
“We’re hopeful that the prosecution gives people, gives the restaurant owners an incentive to make payments on time as they’re supposed to," Dietz said, "so hopefully we won’t have to prosecute too many of these cases in the future.”
Powers says this tax we're paying for whenever we go out to eat, should be separated from other revenue. She believes their delinquency is not intentional, but that most businesses get into trouble when they mix this trust tax with their operating budget.
She said her office and the Commissioner of the Revenue's office tries their best to educate business owners on best practices and book keeping.