Out-of-towners collecting Charleston sales tax

CHARLESTON, W.Va. -- Tom Miller was surprised Saturday when he ordered a pizza from the Pizza Hut in Sissonville and was charged the Charleston sales tax.Miller, a member of the Greater Sissonville Development Council, said the store manager told him he had been told to charge the half-cent sales tax, which raised the price of Miller's pizza from $10.60 to $10.65."This store is seven or eight miles from the city limits," Miller said."It's only a nickel, but [Charleston] could be collecting a lot of money from outside the city," he said. "People who live and work in the unincorporated areas should not be assessed these fees. It's taxation without representation."Charleston's 0.5 percent city sales tax -- one penny for every $2 spent -- went into effect Oct. 1.Members of Charleston City Council voted in March to charge the sales tax in addition to the 6 percent state sales tax on all purchases made within city limits. Money raised from the tax is earmarked for upgrades to the Charleston Civic Center.But Charleston City Manager David Molgaard and Finance Director Joe Estep said there have been a few problems with businesses outside of city limits incorrectly assessing the tax."I've maybe gotten half a dozen calls at the most" about businesses incorrectly assessing the sales tax, Estep said. He said a similar problem arose at Harbor Freight in Cross Lanes, where customers were incorrectly charged the half-cent tax.
Shortly after the tax went into effect, South Charleston Mayor Frank Mullens said he had heard about several businesses in South Charleston that had incorrectly been collecting the sales tax.Managers at other businesses in Sissonville also said they were initially told to collect the tax, Miller said, but the problem was later corrected.Estep thinks the problem may be with businesses that have Charleston mailing addresses but are not actually within city limits. He said the city provided a detailed breakdown of nine-digit ZIP codes that would fall within the city limits, but corporate offices may not have access to the data to tell their local store managers whether or not they should be collecting the tax."I think some of the missteps are occurring because people are using the city [mailing] name, which may or may not be accurate," Estep said. "It's probably comes from the corporate office."Molgaard said the city passed the sales tax ordinance, but by law it's up to the state Tax Department to collect the money, which is then given to the city four times a year. "We haven't even had our first remittance yet," he said.He said the city doesn't intend to collect taxes on businesses and transactions that occur outside city limits. "We don't have authority to levy taxes outside our jurisdictional boundaries," he said.Molgaard said business owners who think they're being asked to collect the sales tax erroneously should contact the state Tax Department.
Reach Rusty Marks at rustymarks@wvgazette.com or 304-348-1215.
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