Aug. 6, 2010
Huntington Occupation Tax Ordinance Posting Omits Abolishment of User Fee
Proposal Includes Seizure of Property for Not Paying; $50 Minimum for Non-Timely Filing, Underpayment
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Although members both the Wolfe Administration and City Council have stated that the $3.00 per week “service” or “user” fee will be abolished, the posted PDF on the City of Huntington website does not contain language of removal of the “service” or “user” fee.
The city's Home Rule authority proposal contained the removal of the user/service fee; however, it's uncertain based on a reading of past articles in local publications, whether the repeal MUST be contained within the Occupation Tax or a separate ordinance. Council members and Wolfe administration members have stated that the user/service fee repeal would be tied to anticipated occupation tax litigation.
For instance, in a June 15 Herald Dispatch story, the writer refers to chairman Jim Insco handing out a proposed timeline. "First and foremost, he wants a first reading for the occupation tax on the June 28 agenda... The June 28 agenda, according to Insco's timeline, would also include a first reading for repealing the user fee, which must be done in order to enact an occupation tax."
On July 31, a published article quoted from the home rule presentation: "The use of the municipal occupation tax and municipal sales/use tax would be limited solely to the elimination of the user fee and reduction of the B and O tax," the city's original plan states. (The current plan is not revenue neutral, but the user fee would be repealed.)
In one of the original drafts of the OCCUPATION TAX, the repeal of Article 722, as amended, was contained in the ordinance.
You can look/read for yourself, by clicking, on the following link to read the CURRENT 37 page OCCUPATION TAX ordinance: http://www.cityofhuntington.com/pages/pdfs/occupationtaxcode.pdf.
Here is a link to the draft ordinance, that contained the REPEAL , http://archives.huntingtonnews.net/images/Draft_Municipal_Occupation_Tax_4.15.10.pdf
AND a link to a summary of the draft: http://archives.huntingtonnews.net/images/Occupation_Tax_Synopsis%5B1%5D.pdf
Here's Insco's proposal, which separated the Occupation Tax and User Fee repeal, but placed them in the same time line: http://archives.huntingtonnews.net/images/inscoplan.pdf
Thus, it is unclear whether the repeal is meant to be contained in the occupation tax ordinance itself, or, a separate, yet to be introduced ordinance. The repeal ordinance to be voted upon Monday, though, includes only the business B & O taxes, per the pdf on the city's web site. The council agenda does not contain an item discussing user fee repeal.
The proposed ordinance does contain language pertaining to searches, seizure of property, inspections, and penalties for non-filing, non-payment or underpayment.
Based on the expansiveness of this ordinance, it could trigger litigation not simply on constitutionality of Home Rule legislation but also on U.S. Constitutional grounds in federal court.
(Editor’s Note: HNN confirmed the omission after 12:30 a.m. and at this hour we have not received a response to any e-mail, voice mail or other messages.)
The city’s website contains the ordinance for Reduction/elimination of certain classes of Business & Occupation taxes, but this does NOT contain any separate language pertaining to the user/service fee.
Assuming from my own legal background that this is an MISTAKEN OMISSION, this reporter would then assume that the user/service fee removal (or contingent upon finding of constitutionality) would have to be AMENDED to the current Occupation Tax proposal.
This could result in a Fourth Reading by Council of the Ordinance, unless the error were deemed as miniscule.
The City's Home Rule proposal contained language that the imposition of an occupation tax requires removal of the user/service fee at the same time that the occupation tax takes effect. The administration and council members have all stated and re-stated this requirement.
In fact, the Home Rule proposal had a "revenue neutral" provision, which is why the new plan which raises money for the general fund must be considerred an "amended" Home Rule proposal and be approved by the state home rule pilot program board.
Based on HNN and Herald Dispatch polling, the occupation tax likely has the six votes necessary for passage. HNN would determine that James Insco, Steve Williams, Nate Randolph, Sandra Clements, and Mark Bates would vote FOR the tax. HNN did not ask Mr. Ritter specifically ask Mr. Ritter for an up or down vote; however, from his statements during the work session , we believed him to be undecided.
PENALTIES, FRIVOLOUS APPEALS
The ordinance includes $50 minimum penalties for untimely payment and underpayment. It includes powers allowing the Director of Finance to comes to a place of business and every self employed person and inspect records during normal business hours, assess a per diem government employee rate for collection or investigation costs, and audit, investigative and subpoena powers. The city may enter into contracts with private examining or collection firms.
Filing a “frivolous appeal” which is deemed for the purpose of delaying or impeding collection would result in a penalty of $250.00 or 25% of the tax , whichever is greater.
The penalties provided in this section for failure to timely file a return, failure to timely pay tax, underpayment of tax, underpayment due to negligence and fraud, or filing a frivolous appeal may (all) be asserted against the same tax payer for the same tax period.
Under the levy and lien components a continuing levy on salary and wages may be placed until such time as the lien has been satisfied. The only property exempt from seizure is: Wearing apparel and school books, fuel , furniture and personal effects up to $1,500, unemployment benefits, worker’s compensation, judgments for support of minor children, annuity and pension payments and public assistance, homesteads (up to $5,000).
EXEMPT AMOUNT OF WAGES, SALARY OR OTHER INCOME
(1) In the case of an individual who is paid or receives all of his wages, salary and other income on a weekly basis, the amount of the wages, salary and other income payable to or receivable by the person during any week which is exempt from levy under paragraph (1), subsection (a) shall be:
(A) Thirty times the state minimum wage per hour, plus
(B) Twenty-five dollars for each additional dependent of the taxpayer.
Surrender of Property Subject to Levy
(a) Requirement. -- Any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Director of Finance, surrender such property or rights (or discharge such obligation) to the Director of Finance, except such part of the property or rights as is, at the time of such demand, subject to any prior attachment, execution or levy.
http://www.cityofhuntington.com/pages/pdfs/occupationtaxcode.pdf
The Director of Finance upon a determination of “reasonable cause” may waive penalties but the burden of proving reasonable cause is upon the taxpayer.
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Huntington Occupation Tax Ordinance Posting Omits Abolishment of User Fee
Proposal Includes Seizure of Property for Not Paying; $50 Minimum for Non-Timely Filing, Underpayment
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Although members both the Wolfe Administration and City Council have stated that the $3.00 per week “service” or “user” fee will be abolished, the posted PDF on the City of Huntington website does not contain language of removal of the “service” or “user” fee.
The city's Home Rule authority proposal contained the removal of the user/service fee; however, it's uncertain based on a reading of past articles in local publications, whether the repeal MUST be contained within the Occupation Tax or a separate ordinance. Council members and Wolfe administration members have stated that the user/service fee repeal would be tied to anticipated occupation tax litigation.
For instance, in a June 15 Herald Dispatch story, the writer refers to chairman Jim Insco handing out a proposed timeline. "First and foremost, he wants a first reading for the occupation tax on the June 28 agenda... The June 28 agenda, according to Insco's timeline, would also include a first reading for repealing the user fee, which must be done in order to enact an occupation tax."
On July 31, a published article quoted from the home rule presentation: "The use of the municipal occupation tax and municipal sales/use tax would be limited solely to the elimination of the user fee and reduction of the B and O tax," the city's original plan states. (The current plan is not revenue neutral, but the user fee would be repealed.)
In one of the original drafts of the OCCUPATION TAX, the repeal of Article 722, as amended, was contained in the ordinance.
You can look/read for yourself, by clicking, on the following link to read the CURRENT 37 page OCCUPATION TAX ordinance: http://www.cityofhuntington.com/pages/pdfs/occupationtaxcode.pdf.
Here is a link to the draft ordinance, that contained the REPEAL , http://archives.huntingtonnews.net/images/Draft_Municipal_Occupation_Tax_4.15.10.pdf
AND a link to a summary of the draft: http://archives.huntingtonnews.net/images/Occupation_Tax_Synopsis%5B1%5D.pdf
Here's Insco's proposal, which separated the Occupation Tax and User Fee repeal, but placed them in the same time line: http://archives.huntingtonnews.net/images/inscoplan.pdf
Thus, it is unclear whether the repeal is meant to be contained in the occupation tax ordinance itself, or, a separate, yet to be introduced ordinance. The repeal ordinance to be voted upon Monday, though, includes only the business B & O taxes, per the pdf on the city's web site. The council agenda does not contain an item discussing user fee repeal.
The proposed ordinance does contain language pertaining to searches, seizure of property, inspections, and penalties for non-filing, non-payment or underpayment.
Based on the expansiveness of this ordinance, it could trigger litigation not simply on constitutionality of Home Rule legislation but also on U.S. Constitutional grounds in federal court.
(Editor’s Note: HNN confirmed the omission after 12:30 a.m. and at this hour we have not received a response to any e-mail, voice mail or other messages.)
The city’s website contains the ordinance for Reduction/elimination of certain classes of Business & Occupation taxes, but this does NOT contain any separate language pertaining to the user/service fee.
Assuming from my own legal background that this is an MISTAKEN OMISSION, this reporter would then assume that the user/service fee removal (or contingent upon finding of constitutionality) would have to be AMENDED to the current Occupation Tax proposal.
This could result in a Fourth Reading by Council of the Ordinance, unless the error were deemed as miniscule.
The City's Home Rule proposal contained language that the imposition of an occupation tax requires removal of the user/service fee at the same time that the occupation tax takes effect. The administration and council members have all stated and re-stated this requirement.
In fact, the Home Rule proposal had a "revenue neutral" provision, which is why the new plan which raises money for the general fund must be considerred an "amended" Home Rule proposal and be approved by the state home rule pilot program board.
Based on HNN and Herald Dispatch polling, the occupation tax likely has the six votes necessary for passage. HNN would determine that James Insco, Steve Williams, Nate Randolph, Sandra Clements, and Mark Bates would vote FOR the tax. HNN did not ask Mr. Ritter specifically ask Mr. Ritter for an up or down vote; however, from his statements during the work session , we believed him to be undecided.
PENALTIES, FRIVOLOUS APPEALS
The ordinance includes $50 minimum penalties for untimely payment and underpayment. It includes powers allowing the Director of Finance to comes to a place of business and every self employed person and inspect records during normal business hours, assess a per diem government employee rate for collection or investigation costs, and audit, investigative and subpoena powers. The city may enter into contracts with private examining or collection firms.
Filing a “frivolous appeal” which is deemed for the purpose of delaying or impeding collection would result in a penalty of $250.00 or 25% of the tax , whichever is greater.
The penalties provided in this section for failure to timely file a return, failure to timely pay tax, underpayment of tax, underpayment due to negligence and fraud, or filing a frivolous appeal may (all) be asserted against the same tax payer for the same tax period.
Under the levy and lien components a continuing levy on salary and wages may be placed until such time as the lien has been satisfied. The only property exempt from seizure is: Wearing apparel and school books, fuel , furniture and personal effects up to $1,500, unemployment benefits, worker’s compensation, judgments for support of minor children, annuity and pension payments and public assistance, homesteads (up to $5,000).
EXEMPT AMOUNT OF WAGES, SALARY OR OTHER INCOME
(1) In the case of an individual who is paid or receives all of his wages, salary and other income on a weekly basis, the amount of the wages, salary and other income payable to or receivable by the person during any week which is exempt from levy under paragraph (1), subsection (a) shall be:
(A) Thirty times the state minimum wage per hour, plus
(B) Twenty-five dollars for each additional dependent of the taxpayer.
Surrender of Property Subject to Levy
(a) Requirement. -- Any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Director of Finance, surrender such property or rights (or discharge such obligation) to the Director of Finance, except such part of the property or rights as is, at the time of such demand, subject to any prior attachment, execution or levy.
http://www.cityofhuntington.com/pages/pdfs/occupationtaxcode.pdf
The Director of Finance upon a determination of “reasonable cause” may waive penalties but the burden of proving reasonable cause is upon the taxpayer.
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