By Carol Vaughn –
Businesses in Accomack County will have to collect a 5% meals tax starting Jan. 1 under a new county law.
The Accomack County Board of Supervisors in September approved the tax, which applies to businesses excluding those in incorporated towns that already have a meals tax.
The tax will be due the 20th of each month, starting Feb. 20 for the month of January.
The tax applies to all food and beverages, including alcoholic beverages, purchased in or from a food establishment.
That doesn’t include groceries but does include items ready for consumption purchased from businesses such as restaurants, grills, coffee shops, cafeterias, cafes, snack bars, lunch counters, convenience stores, theaters, delicatessens, bakeries, drugstores, ice cream shops, food trucks, public or private clubs, resorts, bars, and lounges, among others named in a notice on the Accomack County website https:// www.co.accomack.va.us/businesses/food-beverage-tax
The page includes a link to the one page food and beverage tax coupon businesses must fill out and submit each month.
The tax applies to “prepared foods ready for human consumption,” according to the coupon.
According to information on the coupon, a complete list of food and beverages subject to the tax, along with what is excluded, is in the Code of Virginia section that authorizes counties to impose the tax.
The section of state law, 59.1- 3833, can be found online at https:// law.lis.virginia.gov/vacode/title58.1/chapter38/section58.1-3833/
Items NOT to be taxed under the law include food sold through vending machines; at boardinghouses that do not accommodate transients; in cafeterias operated by industrial plants for their employees only; in public or private schools for students and employees; in hospitals, nursing homes, or senior living facilities to patients or residents; in day care centers; in group homes; and at local farmers markets and roadside stands, where the seller’s income from meal sales does not exceed $2,500.
The law also excludes meals sold by churches, volunteer fire and rescue companies, or nonprofit educational, charitable, fraternal, or benevolent organizations as a fundraising effort, (up to three times a year and on the first $100,000 of gross receipts per year after that); and meals served by churches to members as part of their religious observances, among other exemptions listed.
Customers who buy prepared foods that are ready to eat from a grocery store or convenience store delicatessen counter will have to pay the meals tax on those items, but not on other grocery items.
Businesses in the county must register with the Accomack County Commissioner of Revenue office. They must collect the taxes and submit a monthly report and the taxes collected on or before the 20th of the month following the month in which the taxes were collected.
If the tax is not paid to the county by the due date, there will be a penalty and interest imposed.
No one spoke at an Aug. 18 public hearing about the tax, which affects 68 businesses.
Discussion of imposing a meals tax in the county was prompted initially by anticipated costs associated with the General Assembly’s enactment of the Virginia Overtime Wages Act, which required overtime pay instead of comp time for county employees. The legislation was expected to cost the county $241,000 annually.
Still, in a special session earlier this year, legislators changed the act to define wages and pay to include the award of comp time.
The county is projected to collect at least $300,000 annually in meals taxes, according to Accomack County Administrator Mike Mason’s presentation at the September board of supervisors meeting.
Northampton County has a 4% meals tax, which produced $329,000 in revenue in fiscal year 2020.
Accomack County towns with a meals tax include Onancock, at 5%, Chincoteague, 5%, Parksley, 4%, and Onley, 4%.
