Sept. 4, 2010
ANALYSIS: Cabell Commission Leaning Toward Court Challenge of City Occupation Tax
Amended Plan Adoption Schedule Deviates from Normal Procedures
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) - The Cabell County Commission has verbally made it all but official --- they will likely challenge the City of Huntington’s occupation tax in court. Both commissioners Bob Bailey and Nancy Cartmill indicated their support for the challenge. However, the equally passionate Commission President Scott Bias could not attend. Cartmill asked the vote be postponed until all three commissioners are present.
Although commission attorney Bill Watson did not tip his hand on whether he would seek original jurisdiction in the W.Va. Supreme Court of Appeals, Watson indicated, though, that its likely an injunction will be sought to prevent collection of the tax until the conclusion of litigation.
The occupation tax would be levied on individuals who work inside the City of Huntington. It is capped at a maximum of $1,250 annually. Upon implementation, the user fee is repealed along with B & O taxes on manufacturers and a drop in the B & O on retail and service industries.
Brandi Jacobs-Jones, director of administration and finance, indicated the “user fee” would be re-implemented if collection of the occupation tax is enjoined. However, the ordinance, as written, plainly states an October 1, 2010 deadline. It is uncertain whether the administration or council members will seek to amend the language to ensure that the transition back to the user fee is smooth.
Under a worst case scenario, one or more suits could be filed and an injunction granted after occupation tax collection begins. The ordinance states the user fee can be re-implemented until Oct. 1. Unless clarified, an attorney could argue that the user fee would have to , for example, be reenacted by council, which would place the city money coffers empty of any collection until the procedural hurdles are cleared up.
Several council members have privately indicated a willingness to amend in order to ensure no ambiguities exist.
The Municipal Home Rule Board will review the amended plan on September 24. The commission does not plan to file litigation until the board gives approval to the plan.
A suit has been widely anticipated as the hearings and enactment process occurred at the council meetings. Activist Jim McCallister had spoken of both litigation and a vote on the matter. However, the City Charter does not allow a voter initiated referendum on taxes or budget matters. Whether a referendum could be initiated on other grounds surrounding the same matter is unknown.
Commission members have stated that the challenge will be on constitutional grounds; however, in reading an analysis of their remarks at the meeting, the premise appears solidly on the taxation without representation argument of those who work in Huntington yet live elsewhere. Although a case of first impression for WV, the success of the “taxation without representation” argument against occupation taxes has generally failed in other jurisdictions.
IMPORTANT DATES:
Public hearing on amended home rule plan. 6:30 p.m. Monday, Sept. 13 (one hour before council meeting). Visit, http://www.cityofhuntington.com to view a pdf of the plan.
Council would vote on the first reading of the plan during the 7:30 p.m. Sept 13 meeting. Public comments will be allowed.
If passed, the second reading would occur during a Thursday, Sept. 23 meeting (likely the work session). On Friday, Sept. 24, the State Home Rule Board would review the city’s amendments, which include allowing the proceeds of the occupation tax to go into the general fund and that it no longer be “revenue neutral.”
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ANALYSIS: Cabell Commission Leaning Toward Court Challenge of City Occupation Tax
Amended Plan Adoption Schedule Deviates from Normal Procedures
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) - The Cabell County Commission has verbally made it all but official --- they will likely challenge the City of Huntington’s occupation tax in court. Both commissioners Bob Bailey and Nancy Cartmill indicated their support for the challenge. However, the equally passionate Commission President Scott Bias could not attend. Cartmill asked the vote be postponed until all three commissioners are present.
Although commission attorney Bill Watson did not tip his hand on whether he would seek original jurisdiction in the W.Va. Supreme Court of Appeals, Watson indicated, though, that its likely an injunction will be sought to prevent collection of the tax until the conclusion of litigation.
The occupation tax would be levied on individuals who work inside the City of Huntington. It is capped at a maximum of $1,250 annually. Upon implementation, the user fee is repealed along with B & O taxes on manufacturers and a drop in the B & O on retail and service industries.
Brandi Jacobs-Jones, director of administration and finance, indicated the “user fee” would be re-implemented if collection of the occupation tax is enjoined. However, the ordinance, as written, plainly states an October 1, 2010 deadline. It is uncertain whether the administration or council members will seek to amend the language to ensure that the transition back to the user fee is smooth.
Under a worst case scenario, one or more suits could be filed and an injunction granted after occupation tax collection begins. The ordinance states the user fee can be re-implemented until Oct. 1. Unless clarified, an attorney could argue that the user fee would have to , for example, be reenacted by council, which would place the city money coffers empty of any collection until the procedural hurdles are cleared up.
Several council members have privately indicated a willingness to amend in order to ensure no ambiguities exist.
The Municipal Home Rule Board will review the amended plan on September 24. The commission does not plan to file litigation until the board gives approval to the plan.
A suit has been widely anticipated as the hearings and enactment process occurred at the council meetings. Activist Jim McCallister had spoken of both litigation and a vote on the matter. However, the City Charter does not allow a voter initiated referendum on taxes or budget matters. Whether a referendum could be initiated on other grounds surrounding the same matter is unknown.
Commission members have stated that the challenge will be on constitutional grounds; however, in reading an analysis of their remarks at the meeting, the premise appears solidly on the taxation without representation argument of those who work in Huntington yet live elsewhere. Although a case of first impression for WV, the success of the “taxation without representation” argument against occupation taxes has generally failed in other jurisdictions.
IMPORTANT DATES:
Public hearing on amended home rule plan. 6:30 p.m. Monday, Sept. 13 (one hour before council meeting). Visit, http://www.cityofhuntington.com to view a pdf of the plan.
Council would vote on the first reading of the plan during the 7:30 p.m. Sept 13 meeting. Public comments will be allowed.
If passed, the second reading would occur during a Thursday, Sept. 23 meeting (likely the work session). On Friday, Sept. 24, the State Home Rule Board would review the city’s amendments, which include allowing the proceeds of the occupation tax to go into the general fund and that it no longer be “revenue neutral.”
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