Sept. 24, 2010
Huntington Council Approves Occupation Tax 8-3; State Board Meets Today
No Done Deal As Complications Come from State Tax Department, Auditor’s Office
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Huntington City Council on Thursday vote to approved the city’s Revised Home Rule Plan.
Jim Ritter, Teresa Loudermilk, Sandra Clements, Jim Insco, Mark Bates, Steve Williams, Russ Houck and Nate Randolph voted for the plan. Scott Caserta, Frances Jackson and Rebeccah Thacker voted no. Loudermilk previously voted against the tax, but voted in favor of the revised plan.
Considered a comprehensive tax reform package, the plan consists of a one percent occupation tax which may generate $3-$3.5 million or more in additional revenue after the repeal of the $3 a week “user fee.” The business & occupation tax is eliminated on manufacturing; the B & O is reduced on certain other business entities. The plan also implements a 1% city sales tax.
Under the Home Rule Pilot Program, Huntington’s plan contained a “revenue neutral” possible occupation tax. The state home rule board meets Friday afternoon in Charleston to discuss Huntington’s revisions.
At large councilman Steve Williams said after the vote that state approval is not a done deal. He specifically stated that the board may have concerns that the proposed suit by the Cabell County Commission seeks to challenge both the constitutionality of the occupation tax AND the home rule pilot program.
The board meets at 1:30 today, Sept 24 in Charleston.
In addition, the State Tax Department has put a damper on the sales tax collection process. Throughout the hearing and local voting process, the city has stated that the tax department would collect the 1% sales tax and remit it to Huntington minus an administrative fee. According to a letter from the Tax Department, the tax department estimates it would cost about $2.9 million dollars to administer the collection of the tax. The sales tax would likely only bring in $3.7 million dollars.
Huntington officials had indicated that the administrative fee would be retention of one percent; however, that would only be a fraction of the nearly $3 million in costs.
As for the occupation tax, the Auditor’s office told the city last week that its outdated software did not allow for collection of a local “income” /”occupation” tax. State Agencies (such as Department of Health and Human Services, Marshall University, Cabell County Schools) are collectively the city’s largest employer.
Huntington Finance Director Deron Runyon has countered that the taxpayer, not the state, is responsible for payment and withholding. He said the 1% could be estimated then withheld.
In an interview after the Monday Finance Committee meeting, Williams personally suggested that the city not count on utilization of revenues from the occupation tax anytime soon.
The ordinance contains a provision that if collection of the occupation tax is enjoined; the user fee will continue to be collected.
The Cabell County Commission does plan to seek an injunction to prevent collection of the tax. If a judge grants the injunction, it’s a legal sign that the county could likely prevail on the suit against the tax.
What’s unknown, though, are how many suits are planned and in what venues. Since constitutional questions are involved , the original jurisdiction of the WV Supreme Court of Appeals could be invoked. Or, they could ask the Cabell County Circuit Court to rule. Under that situation, the judge and litigants could potentially ask and answer a certified question to the state’s highest court, too.
One suit has been rumored as having Kanawha County Circuit Court origination. And, due to , for instance, a diversity of citizenship of potential taxpayers as well as , for instance, the enforcement processes, a U.S. District Court challenge is possible, though likely not probable since the overwhelming nature of the contested legislation is within the state of West Virginia. Federal Courts often differ to state court in the interpretation of state law.
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Huntington Council Approves Occupation Tax 8-3; State Board Meets Today
No Done Deal As Complications Come from State Tax Department, Auditor’s Office
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Huntington City Council on Thursday vote to approved the city’s Revised Home Rule Plan.
Jim Ritter, Teresa Loudermilk, Sandra Clements, Jim Insco, Mark Bates, Steve Williams, Russ Houck and Nate Randolph voted for the plan. Scott Caserta, Frances Jackson and Rebeccah Thacker voted no. Loudermilk previously voted against the tax, but voted in favor of the revised plan.
Considered a comprehensive tax reform package, the plan consists of a one percent occupation tax which may generate $3-$3.5 million or more in additional revenue after the repeal of the $3 a week “user fee.” The business & occupation tax is eliminated on manufacturing; the B & O is reduced on certain other business entities. The plan also implements a 1% city sales tax.
Under the Home Rule Pilot Program, Huntington’s plan contained a “revenue neutral” possible occupation tax. The state home rule board meets Friday afternoon in Charleston to discuss Huntington’s revisions.
At large councilman Steve Williams said after the vote that state approval is not a done deal. He specifically stated that the board may have concerns that the proposed suit by the Cabell County Commission seeks to challenge both the constitutionality of the occupation tax AND the home rule pilot program.
The board meets at 1:30 today, Sept 24 in Charleston.
In addition, the State Tax Department has put a damper on the sales tax collection process. Throughout the hearing and local voting process, the city has stated that the tax department would collect the 1% sales tax and remit it to Huntington minus an administrative fee. According to a letter from the Tax Department, the tax department estimates it would cost about $2.9 million dollars to administer the collection of the tax. The sales tax would likely only bring in $3.7 million dollars.
Huntington officials had indicated that the administrative fee would be retention of one percent; however, that would only be a fraction of the nearly $3 million in costs.
As for the occupation tax, the Auditor’s office told the city last week that its outdated software did not allow for collection of a local “income” /”occupation” tax. State Agencies (such as Department of Health and Human Services, Marshall University, Cabell County Schools) are collectively the city’s largest employer.
Huntington Finance Director Deron Runyon has countered that the taxpayer, not the state, is responsible for payment and withholding. He said the 1% could be estimated then withheld.
In an interview after the Monday Finance Committee meeting, Williams personally suggested that the city not count on utilization of revenues from the occupation tax anytime soon.
The ordinance contains a provision that if collection of the occupation tax is enjoined; the user fee will continue to be collected.
The Cabell County Commission does plan to seek an injunction to prevent collection of the tax. If a judge grants the injunction, it’s a legal sign that the county could likely prevail on the suit against the tax.
What’s unknown, though, are how many suits are planned and in what venues. Since constitutional questions are involved , the original jurisdiction of the WV Supreme Court of Appeals could be invoked. Or, they could ask the Cabell County Circuit Court to rule. Under that situation, the judge and litigants could potentially ask and answer a certified question to the state’s highest court, too.
One suit has been rumored as having Kanawha County Circuit Court origination. And, due to , for instance, a diversity of citizenship of potential taxpayers as well as , for instance, the enforcement processes, a U.S. District Court challenge is possible, though likely not probable since the overwhelming nature of the contested legislation is within the state of West Virginia. Federal Courts often differ to state court in the interpretation of state law.
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