RICHMOND, Va. -- Mac McCormack is known around Richmond, and the country, for the selection of whiskies he serves in his restaurants.
“I’ve been an owner for almost 30 years," the owner of McCormack's Whisky Grill in Richmond and McCormack's Big Whisky Grill in Henrico, said. "We buy whole barrels of whiskey from distilleries so that when you come and you get a specific bourbon at the restaurant, it's only available here."
But McCormack prides himself in running his restaurants the opposite of how he said City Hall runs Richmond.
"I feel like if I did my business like the City of Richmond did their business, I would be out of business," he said.
He recently found himself in the same boat as dozens of other Richmond business owners when he received a letter in January from the Richmond Finance Department that said his meals tax account for his Fan District restaurant was delinquent.
"I went to our accountant who handles probably like 250 restaurants in Richmond, and she goes, ‘Oh, boy, you got one of these too,'" he said.
The letter from the city didn't give him any further information other than he owes money.
So in investigating the problem himself, McCormack discovered a payment from July 2018 that didn’t clear the first time it was submitted. The check, however, did clear two days later and he confirmed that with his bank.
"I brought the City of Richmond evidence that we paid that tax, and they said it was never applied to our accounts, and they don't know what to do now," he said. "The city has no record that our payment was actually received, so somebody entered it into the wrong business is my guess."
So for more than five years, the finance department applied all his subsequent tax payments to what they claimed was a delinquent account — meaning he unknowingly fell into a cycle of never being current on his payments.
All the while, the city collected ten percent late fees every single month, without ever notifying McCormack.
According to Richmond, McCormack owed City Hall more than $17,000 after tacking on years of penalties and interest on a tax payment of about $1,400.
The outstanding balance is stressing him out.
"Sometimes in the summertime when it's slow, that's two weeks' worth of business that they're saying that we owe them just in penalties and interest," he said.
In his latest memo to Richmond City Council, the Chief Administrative Officer of Richmond Lincoln Saunders said the issue may boil down to a process change in 2019.
He said that was when the finance department decided to redistribute how the city applied tax payments to prioritize covering delinquencies, rather than the current month.
While Saunders maintained the City of Richmond followed state and local laws, he admitted communication to the public was “not at the level we strive to achieve.”
"They just don't care," McCormack said. "They don't care about small businesses in Richmond.”
An opinion McCormack formed, in part, when he opened Big Whisky in Henrico County — a neighboring locality that also collects a meals tax but gives taxpayers notifications about delinquencies and allows business owners to check the status of their accounts online.
"I didn't realize how difficult it was until we opened in Henrico," he said. "I realized that there's a much better way of doing things."
Saunders said meals tax reviews and collection improvements are underway. The finance department will "explore" giving impacted restaurant owners "more relief"
Due to the way the system set up, Saunders said the city will have to review each restaurant owner's account separately and manually. It's a process he said will be time intensive.
McCormack said he hasn't heard back yet from City Hall after going there in person last week to have his issues addressed.
Local News
Restaurant owners unite over meals tax frustration, snowballing penalties
Local News
Richmond says it's looking to 'give grace' concerning mounting meals tax issues
Eat It, Virginia
