Southampton County meals tax passes

Published 8:13 am Wednesday, November 4, 2009

COURTLAND—Voters in Southampton County approved a referendum that gives the Board of Supervisors the authority to levy a meals tax.

The proposal passed by just 71 votes, or one-and-a-half percent of the votes cast. The final vote count was 2307-2236.

“I’m a bit surprised that the measure passed on its first attempt, particularly given lower levels of voter turnout with a non-Presidential election,” Southampton County Administrator Michael Johnson said. “But this is one additional measure at the Board of Supervisors’ disposal to help diversify its sources of revenue and mitigate its continued reliance on property taxes.”

With the referendum’s passage, the county board is authorized to consider adopting a local ordinance to impose the meals tax. The board is still required to hold a public hearing on the matter before the ordinance takes effect.

The meals tax will apply to prepared food and beverages offered at restaurants, delicatessens and convenience stores, but will not apply to food and beverages sold from vending machines. Food prepared and sold in public school cafeterias, nursing homes and hospitals, or by churches, civic groups, fire departments and rescue squads will also be exempt from the tax.

The tax would also not be enforced in any of the six towns within the county — Boykins, Branchville, Capron, Courtland, Ivor and Newsoms — unless the towns grant the county the authority to do so.

Revenue from the meals tax — expected to be between $150,000 and $160,000 a year — will go toward the financing, construction and maintenance of county buildings, including schools.

Most of Southampton’s neighbors — Greensville and Isle of Wight counties, and the cities of Franklin, Suffolk and Emporia — already levy a meals tax. State law caps the maximum tax that a county can levy at 4 percent. By contrast, cities can go up to 6.5 percent and towns 8 percent. Both counties and all three cities charge the maximum tax allowed.

According to Johnson, property taxes accounted for 64 percent of Southampton’s local revenue, and on average provided 67 percent of local revenue for the 95 counties in Virginia. Meanwhile cities across the state, on average, collected only 55 percent of their local revenue through property taxes. Franklin took in 33 percent of its local revenue through property taxes.

The real estate tax rate in Southampton is 72 cents per $100 of assessed value. The statewide median rate is 57 cents.

“As a city, (Franklin) has the authority to impose taxes on food and beverages, tobacco, admissions and higher rates on transient occupancy,” Johnson said. “These potential sources of revenue are not available to county governments without voter approval or special legislation by the General Assembly.”

Similar meals tax referendums were on the ballot in five other counties. Voters in Rockingham County approved it, but the measure was defeated in Halifax, Patrick and Sussex counties. Election results from Bath County were unavailable.

Last year, voters in King William County approved a meals tax by just 45 votes, with more than 7,800 total votes cast. The tax failed in six other counties, including Bath and Rockingham.

Johnson said the county spent roughly $5,500 on information pamphlets that were distributed to educate voters on the referendum. The pamphlets did not encourage the referendum’s passage or defeat.