Home Rule status means Alderson is one month away from implementing a sales tax.
The unanimous approval of Home Rule status by the West Virginia Home Rule Board for the town was announced by Mayor Travis Copenhaver during the October 14 meeting of Town Council. The announcement also means the town could also move forward with implementing a 1% sales tax.
“We wouldn’t be doing this if we hadn’t been approved unanimously for our Home Rule application yesterday. … All four requests we had for Home Rule status were approved unanimously.”
Upon the announcement, the room broke into applause. The Home Rule status means the town has four new authorities:
– “on the spot” code enforcement citations
– the removal of party membership requirements from local parties for election boards
– disposition of equipment or property without public auction (property under $15,000)
– a 1% sales tax and corresponding B&O tax reduction
As explained by the Home Rule website, “The West Virginia Legislature created the Municipal Home Rule Pilot Program in 2007. The enabling statute empowered municipalities participating in the program to be creative in addressing local problems by implementing ordinances, rules, and regulations not otherwise available because of the various one-size-fits-all statutes that apply to all municipalities. Bridgeport, Charleston, Huntington, and Wheeling were accepted as the first participants in the program.”
Copenhaver and council celebrated several of the town’s new capabilities.
“The other part of Home Rule that we have is that we will be able to do on the spot citations for zoning and property violations,” Copenhaver explained. “As our code is written now, it requires a notice to abate, 30 days. … That will not be the case in a month or so, once we [change] the ordinance. You will be issued a citation, go to municipal court, if you disagree with that, you can appeal to the Greenbrier County Circuit Court. The other thing that is another win, any property that is under $15,000 or less, can be liquidated without a public auction. That having been said, we decide we’re going to sell the house next door, the house on the hill, or sell the water plant property, or sell whatever, if it is less than $15,000, we do not have to go to auction.”
Another item on the agenda, the sales tax, is also the result of the Home Rule decision.
“You all will remember that I promised if Home Rule status made it, I would ask council to rescind our B&O changes,” Copenhaver said. “Those changes will be on the next agenda for next month, and the following month to rescind the 0.5% and the wholesale tax to zero. Further, it remains in effect until [June 30], 2022. Once the June 30 day hits, the B&O tax is then gone and the municipal sales tax will be collected.”
Consideration for a sales tax was one main driver for the Home Rule application. Alderson’s business and occupation (B&O) tax was passed on 3-2 vote by council in April, with Councilmembers Tod Hanger and Charlie Lobban voting against. It was then, based on a council vote in May, frozen for consideration of how it affects gross revenue, rather than profit. In August, it was revised to 0.5 percent.
Several business owners approached the council with frustration about the B&O tax during its passage.
“The problem is, right now, [that] it’s been the worst year ever,” said Sarah Alderson of The Alderson Store. “It just seems like the timing is bad and there are people on the edge waiting, and maybe not opening again. It may seem like a straw, but it’s the straw that broke the camel’s back. It’s enough, to me, that it’ll affect the little guys. I would feel much better if it were a tiered one, like in Lewisburg, like in White Sulphur.”
Alderson business owners requested consideration before deals with profit versus gross – a B&O tax is implemented on gross revenue, which includes all incoming money, while the sales tax is placed on the customer at the point of sale and remitted to the state directly, not affecting gross income.
“We’ve been open for 36 months at the Corner Store across the bridge,” explained Bobby Ortman in the May meeting. “Between COVID and being sick, I’ve been closed for 20 months. I haven’t turned a profit in three years. When I spend $1,000, I have to make $3,000 back. … When you’re talking gross, that’s actually 3%. … I can’t afford three or four percent. …If it’s not on gross, it would be easier to swallow, but if there’s a tiered way to do it, [it would help]. It wouldn’t be easy, none of this is easy.”
With the Home Rule approval for a sales tax, Copenhaver and council agreed to move forward with the first reading of the sales tax ordinance.
“The last item that we had was requesting the 1% sales tax to repeal our B&O tax for retailers and wholesalers. This ordinance goes into effect, this is the first read, on July 1, 2022, just so that our person who’s here from the media understands, this takes 180 days notice by the tax commissioners to businesses that are within the municipality. Cash registers have to be reset. This tax is remitted like your regular state sales tax. So if there’s sales tax for the state, it goes to the municipality as well. Then they remit this money back to us.
The ordinance is expected to go to public hearing, second reading, and a council vote in the next Alderson Town Council meeting.