Collecting a meals tax versus a peddlers’ fee from mobile food vendors was the main topic of discussion at South Boston Town Council’s work session Monday evening.
“What we’re probably going to do is do away with the peddlers’ fee,” town manager Tom Raab concluded at the end of the discussion. “If you sell food, you’re going to pay meals tax.”
Council members will make that ultimate decision at a later date, after reviewing the financial benefits of charging the 6% meals tax versus peddlers’ fee, at their next work session.
A local food and ice cream vendor, Michael Coleman, had asked council to look into vendor fees at council’s January meeting, and Monday’s discussion was a follow-up to that request.
The town’s current peddlers’ fee is $500 per year or $100 per day for “itinerant merchants or peddlers.”
Peddlers are not required to charge their customers a meals tax.
“We [vendors] work hard to make $500,” Coleman told council members at the previous council meeting. “Can a reconsideration be issued on that price? Five hundred dollars is extremely high.”
Coleman had researched other localities throughout the state, including Richmond, and brought to the council’s attention that the annual vendors’ fees for those localities were less than South Boston’s peddlers’ fee.
But the question that arose was whether those localities were requiring vendors to charge a meals tax in addition to collecting the vendors’ fee.
After doing some research, Raab found that in the case of Richmond, the answer to that question was “Yes.”
“We are continuing to look at different localities finding out what they do and how they do it,” Raab told council.
In 2018, 13 businesses got a peddlers’ license to sell their wares in South Boston. Seven of those were food vendors. Those vendors come from as far away as Florida, selling everything from cinnamon rolls to fireworks.
The town of South Boston’s zoning ordinance defines a “mobile food unit” as a “mobile food preparation or service unit in which ready to eat food is cooked, wrapped, packaged, processed or portioned for service, sale or distribution.”
The code states that a mobile food unit may not operate at the same place for more than three days in a row without being moved. Zoning administration may approve extensions up to seven additional days. Some of the vendors only come to town once or twice a year.
“If they only come here twice a year, they’re getting quite a deal,” said councilman Bill Snead.
Councilman Michael Byrd asked if the time limits on the mobile food units’ operation at the same location would change if the town decides to charge the vendors a meals tax versus the peddlers’ fee. Raab said that no, those parameters would stay the same.
Mayor Ed Owens asked Raab for clarification that, according to the town code, if the town requires a person to report meals tax and they fail to report it, that constitutes a felony charge. Raab replied that yes, it is a felony charge, and the town would take the offender to court.
Council came to an unofficial consensus to charge mobile food vendors meals tax versus peddlers’ fee.
“Are you suggesting that my ice cream truck would pay meals tax, too?” Coleman asked.
Raab told Coleman that he would not have to pay the tax for his ice cream truck since all his ice cream is prepackaged, only for his food truck, if council votes on the meals tax in lieu of the peddlers’ fee.
During Monday’s meeting, Raab also updated council on requests to allow gaming machines (internet).
He advised council to wait until the state’s General Assembly votes on Senate Bill 98 before making any decisions about allowing gaming machines in town. SB 98 adds the play of any “skill” game (electronic gaming machine) into the definition of illegal gambling in Virginia.
In March 2019, town council reviewed a resolution initiating a proposed text amendment to the town zoning ordinance listing commercial indoor entertainment by special use in B-1 Neighborhood Zoning districts, but took no action.
The town’s finances also were a topic of discussion at Monday’s council work session.
Town finance director Mickey Wilkerson gave the report.
“This is probably the best financial report that I’ve ever prepared since I’ve been doing this job,” Wilkerson said. “This is the first time I ever remember seeing $4,000,000 for cash operating.” The town’s year-to-date cash operating general fund is $4,100,936.
Councilman Bob Hughes gave a “thank you” to Wilkerson and the town’s other department heads on the healthy financial report.
In other business, council reviewed a request from Halifax County Industrial Development Authority (IDA) to partner with them and the town of Halifax on a U.S. Department of Agriculture rural business development grant to create a revolving loan fund to support new and existing small businesses.
Town staff will draft a resolution of agreement on the grant partnership for council’s approval at a future meeting, most likely in March.
Council also considered a staff recommendation to renew a four-year term for Dr. Allan Smith on the board of zoning appeals. Smith’s term is set to expire on Feb. 29.