H. B. 3284
(By Delegates Shott and Frazier)
[Introduced March 23, 2009; referred to the
Committee on Political Subdivisions then Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §11-28-1, §11-28-2,
§11-28-3, §11-28-4, §11-28-5, §11-28-6, §11-28-7, §11-28-8 and
§11-28-9, all relating to allowing local governments to levy
a sales tax on food and beverages; providing definitions;
county and municipal options; use of tax collected;
exemptions; providing that wrongful and fraudulent use of
funds is the criminal offense of embezzlement; apportionment
of tax between local jurisdictions; and severability
provision.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §11-28-1, §11-28-2,
§11-28-3, §11-28-4, §11-28-5, §11-28-6, §11-28-7, §11-28-8 and
§11-28-9, all to read as follows:
ARTICLE 28. LOCAL OPTION FOOD AND BEVERAGE TAX.
§11-28-1. Food and beverage tax.
A county or municipality is hereby authorized to levy a tax on
food and beverages sold for human consumption by a restaurant as
defined in this article. Any tax levied under this article may not
exceed three percent of the gross amount charged for the food and
beverages.
§11-28-2. Definitions.
As used in this article:
(a) "Alcoholic beverage" means any alcohol, beer, wine and
spirits, and any liquid or solid capable of being used as a
beverage, including any beverage that consists of a mixture of
alcoholic and nonalcoholic liquids or solids.
(b) "Beverage" means any alcoholic or nonalcoholic liquid
intended for human consumption.
(c) "Fund-raising organization" means any church, school,
fraternal or social organization, volunteer fire department or
rescue squad which periodically sells food and beverages for public
consumption to raise funds to benefit the organization.
(d) "Municipal" or "municipality" means any city or town.
(e) "Not-for-profit capacity" means the sale of food for the
intentional purpose of equaling the operating costs of the
restaurant.
(f) "Restaurant" means any place where food is prepared for service to the public on or off the premises, or any place where
food is served; including, but not limited to, lunchrooms, food
counters, food trucks or carts, short order or fast food eateries,
cafeterias, coffee shops, cafes, taverns, delicatessens, dining
accommodations of public or private clubs, kitchen facilities of
hospitals and nursing homes and dining accommodations of public and
private schools and colleges.
§11-28-3. County option.
(a) Any tax levied under this article must be approved by
referendum within the county in which the tax is to be levied.
(b) A referendum for imposition of a county food and beverage
tax may be initiated by:
(1) A resolution of the county commission; or
(2) A petition filed with the county commission signed by a
minimum of ten percent of the county's registered voters as of
January 1 in the year in which the petition is filed.
(c) A petition or resolution may designate the length of time
of the tax's imposition or projects or purposes for which the tax
will be levied: Provided, That such information shall be included
on the referendum's ballot.
(d) The county commission shall publish a Class III legal
advertisement in compliance with the provisions of article three,
chapter fifty-nine of this code in a newspaper of general
circulation in the county.
§11-28-4. Collection of tax, use.
(a) Any tax levied under section three of this article shall
be collected in a manner prescribed by the county commission.
(b) Any tax levied under section three of this article shall
be placed in the county's general revenue fund and expended as the
county commission deems appropriate: Provided, That any projects
or purposes designated for the imposition of the tax and included
on the referendum ballot shall be paid as follows:
(1) A minimum of forty percent of the collected tax shall be
remitted by the county to the county's Economic Development
Authority to be expended for economic development purposes;
(2) Forty percent of any tax collected under this article from
a restaurant located in a municipality shall be remitted by the
county to the municipality in which the restaurant is located, to
be expended in a manner which the municipality's governing body
deems appropriate.
§11-28-5. Municipal option.
Any municipality located in a county that has not levied, or
sought to levy, a food and beverage tax within one year following
the effective date of this article, is authorized to levy a tax on
food and beverages sold for human consumption by a restaurant as
defined in this article. Any tax levied under this article may not
exceed two percent of the gross amount charged for such food and
beverages.
(a) Any tax levied under this article must be approved by
referendum within the municipality in which the tax is to be
levied.
(b) A referendum for imposition of municipal food and beverage
tax may be initiated by:
(1) A resolution of the municipality's governing body; or
(2) A petition filed with the municipality's governing body
signed by a minimum of ten percent of the municipality's registered
voters as of January 1 in the year in which the petition is filed.
(c) A petition or resolution may designate the length of time
of the tax's imposition or projects or purposes for which the tax
will be levied: Provided, That such information shall be included
on the referendum's ballot.
(d) The municipality's governing body shall publish a Class
III legal advertisement in compliance with the provisions of
article three, chapter fifty-nine of this code in a newspaper of
general circulation in the municipality.
§11-28-6. Exemptions.
(a) This tax is applicable to any restaurant whose food and
beverage preparation and service is regulated by county boards of
health. Any tax levied under this article may not be levied upon
food and beverages sold from:
(1) Places manufacturing packaged or canned foods which are
distributed to grocery stores or other similar food retailers for sale to the public;
(2) Vending machines;
(3) Restaurants operating in a not-for-profit capacity;
(4) Churches which serve meals as a regular part of regular
religious observances;
(5) Fund-raising organizations; or
(6) Food counters or delicatessens which operate as part of a
larger retail business which:
(A) Food and beverage sales do not exceed thirty percent of
the larger retail business's total gross sales; and
(B) Have ten or fewer seats on the premises at which food is
consumed.
(b) Any tax levied under this article may not be applied to
any discretionary gratuity paid by the purchaser in addition to the
sales price, nor to any mandatory gratuity or service charge added
by the restaurant to the sales price that does not exceed twenty
percent of the sales price.
§11-28-7. Wrongful and fraudulent use of funds.
All food and beverage tax collections are considered in trust
for the county or municipality imposing the applicable tax. The
wrongful and fraudulent use of the proceeds other than remittance
to the county or municipality as provided by this article
constitutes embezzlement pursuant to section twenty, article three,
chapter sixty-one of this code.
§11-28-8. Apportionment.
When a business is located partially within two or more local
jurisdictions because of a boundary line that passes through the
place of business, and one or more of the local jurisdictions
imposes the food and beverage tax, the tax rate of each applicable
local jurisdiction shall be apportioned between the local
jurisdictions. The apportionment shall be based upon the area in
the political subdivision which the place of business actually
occupies and actively uses in connection with the business.
§11-28-9. Severability provision.
If any provision of this article or the application thereof to
any person or circumstance is held invalid, the invalidity does not
affect other provisions or applications of this article which can
be given effect without the invalid provision or application and to
that end the provisions of this article are severable.
NOTE: The purpose of this bill is to authorize county and
municipal governments to levy a tax on food and beverages and
designates the usage of some funds collected by the tax.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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