Thursday, November 6, 2014

CenterStage Tax Forgiveness Complicates Hardywood Bill

The city is threatening to turn the brewery's unpaid meals tax over to a collections firm.

Posted By on Thu, Nov 6, 2014 at 1:17 PM

A week ago Richmond officials gave the parent group of CenterStage a $1.75 million grant so it could pay its real estate tax bill. City officials are taking a less generous tack when it comes to collecting a similar outstanding bill from Hardywood Park Craft Brewery.

The origin of both organizations’ unpaid bills follows a parallel track. CenterStage says city officials said it wouldn’t have to pay taxes on the two theaters it runs. Hardwood says city officials told them it didn’t need to collect city meals tax on the beer it sells.

Both ended up with bills they said they couldn’t pay: Hardywood’s for $50,000 and CenterStage's for $1.75 million.

The difference is administrators went to lengths to convince City Council to forgive CenterStage’s debt. The city granted the arts group enough money to cover the bill and the group turned around and paid that money right back to the city, wiping out the debt.

In Hardywood’s case, the city is threatening to turn the uncollected meals tax bill over to a collections firm. Tammy Hawley, the mayor’s press secretary, said “state law does not give local tax officials authority to deviate with respect to collecting meals taxes.”

State law also didn’t give city officials authority not to assess real estate taxes on CenterStage’s buildings. But the mayor’s office found a way to solve the issue.

City Council President Charles Samuels says that in light of the CenterStage issue, the mayor’s office should be taking a more conciliatory tact when it comes to Hardywood.

“With the CenterStage issue, we’ve set a precedent for addressing exactly this kind of situation,” Samuels says. “And when you look at the money we have spent as a city on the training camp and on the Stone Brewing project -- I believe there comes a point where we also need to look out for our home grown successes as well as those we’ve attracted to Richmond. “

Councilman Jon Baliles says he doesn’t believe the city should grant Hardywood $50,000 so it can pay its bill. But he says the city should be able to resolve the issue administratively and make the tax bill go away.

City Council didn’t add breweries to the list of entities subject to the meals tax until September, which is when Hardywood began collecting and paying the 6-percent tax. Assessing the tax on beer sold before that date is indefensible, Baliles says.

“Put it this way,” he says, “if the city takes this to court, they will lose.”


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