VIRGINIA
Arlington restaurants delinquent on taxes
Every time you go to an Arlington restaurant or food truck you pay a 4 percent meal tax in addition to a 5 percent sales tax. It’s a custodial tax, meaning the restaurants hold onto your tax dollars until taxes are due.
But roughly 10 percent of operating food venues and 25 percent of all registered food venues don’t give those taxes to the government. More than 200 restaurants out of roughly 900 operations registered in Arlington County are delinquent on their payments.
Collectively, restaurants owe nearly $1 million in taxes total. It’s money that would normally go into a larger pool that funds the entire Arlington County budget, including transportation and education.
“What we’re talking about is embezzlement,” says Frank O’Leary, Arlington County Treasurer.
O’Leary says the problem is clear, but the answer is not. Officials can seize bank accounts, but property is much more difficult. Restaurants often lease equipment and space. And to go after owners, officials must prove responsibility, which is difficult and highly sensitive.
“All we can really seize is what’s in the register that day and that’s simply not enough,” says O’Leary.
O’Leary plans to introduce a bill during the 2013 legislative session in Richmond that would allow local governments to close restaurants that don’t pay. Until then, he says, patrons and tax payers carry the burden.
“One way or another, you’re going to end up paying those taxes,” he says.
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