Local businesses say fixing overtaxing problems is complicated

Posted at 7:30 PM, Jul 21, 2014
and last updated 2014-07-21 19:42:31-04

HENRICO, VA (WTVR) -- Stuart Martin owns Dunn's Drive-Inn Barbecue and he admits discovering he was overtaxing customers after watching  a series of CBS 6 investigations last week.

"I didn't realize I was taxing incorrectly and then I watch your story that night," Martin said. "I'm sorry it was not done purposely."

Martin says he immediately went to fix the issue on his register and credit machine and quickly discovered the fix wasn't easy.

"There is no way to put a tax code in there," Martin said, alluding to the fact that many small businesses like his own use simple credit card machines that don't allow for two tax rates.

Since June 1st under Henrico law, beverages are not to be taxed when sold alone but they are to be taxed when sold with meals.

Because he is unable to buy a new credit card machine  he says he has enacted a simple rule: beverage-only purchases must be paid in cash.

"With credit cards, if they're not going to purchase any food we can't do it anymore," Martin says.

Henrico businesses aren't alone; last week CBS 6 discovered Richmond businesses were also overtaxing.

Political watchdog and Attorney Paul Goldman says he and others are pondering the idea of legal action, especially in Richmond where the meal tax has been in place for years.

Goldman believes the potential overtax could be in the millions and that it is the government's job to enforce the law.

"They are supposed to fix this problem and they haven't showed an interest in fixing it," says Goldman.

The City of Richmond is offering refunds to anyone with an overtaxed receipt. They say so far no one has come to city hall asking for cash back.

In both Henrico and Richmond all of the over collected taxes goes to local government.