CPA Wants Tougher Rules for Town’s Hospitality Tax Collectors

In a report to the Town Council Monday, the town’s accounting consultant, CPA Kem Smith, said the mayor had asked her to research and come up with improvements to the town’s hospitality tax ordinance that requires businesses in the town who serve prepared meals and beverages or have on-premises consumption of alcohol, beer or wine, to collect for the town a two percent hospitality tax.

Smith said changes to the ordinance would give the town more recourse for non-payers and would clarify rules and penalties.

Smith said she found that, when comparing sales tax reported to the town by the town’s hospitality businesses with the sales those businesses report to the Department of Revenue, “we have a lot of discrepancies. The discrepancies are usually under-reporting to the town.”

She said she would like to get a copy of each businesses’ Department of Revenue’s sales report at the time that businesses turn in their local hospitality tax returns to the town.

“Then we can see if there are discrepancies,” Smith said. “We don’t have a lot of teeth in our [current] ordinance so even if there are discrepancies, there isn’t a lot we can do about it.”

Smith suggested that other towns have penalty clauses that “will spank somebody for not doing the right thing. A 5 percent penalty is common and some charge up to 20 percent. And that can be for being even one day late.”

The proposed ordinance states that Town Council would be the only entity allowed to waive a penalty.

Council members discussed penalties, including any or all of the following:

•  A business’s license would not be renewed if that business has outstanding taxes or penalties,

• The Town would not conduct business with offenders, and

• Up to 25 percent penalties after two offences, and 25 percent more for each subsequent offence.

Council passed first reading of the ordinance. The hospitality tax is a major source of the funding for construction of the town park.

In other business, Council passed a resolution opposing funding cuts to Ft. Jackson and McEntire Joint National Guard Base; authorized delivery of deeds and easements for water and sewer utilities for the park;  authorized the mayor to execute an encroachment agreement for the city of Columbia water connection and passed first reading to annex a property owned by Councilman Jeffery Branham into the Town.