ROANOKE, Va. – Dozens of restaurants in Roanoke owe money to the city.
When you dine out in Roanoke City, a portion of your bill goes toward a local meals tax, intended to fund city services.
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However, recent legal actions reveal that some restaurant owners are failing to forward that money to the city, leading to embezzlement charges.
“It’s worth remembering that this food and beverage tax specifically, it’s taxes that consumers pay,” said Roanoke Commissioner of the Revenue Ryan LaFountain. “They give the money to the restaurants, for them to give to the city. If that money doesn’t go from the restaurant to the city, they’re stealing from the people that paid that tax.”
This issue has gained attention as several businesses in Roanoke face legal trouble for falling behind on their tax payments.
The owner of Local Roots, a restaurant that closed in July, is charged with embezzlement for not paying the required meals tax.
Court records also show the owner of FarmBurguesa, a Roanoke County restaurant, owes more than $6,000 in unpaid taxes.
LaFountain‘s office and the city Treasurer’s office sent a press release out on Wednesday talking about joint efforts to address the issue.
“Every month, businesses that collect prepared food and beverage taxes must file reports with the Commissioner of the Revenue and pay the Treasurer the amount collected for prepared food and beverage taxes for the prior month,” according to the release. “Collecting taxes from taxpayers and misdirecting those funds due to the city constitutes embezzlement, a felony under the Code of Virginia.”
Efforts to nudge delinquent owners to pay without resorting to court action can include seizing equipment or funds.
Officials emphasize that most businesses are compliant and that each case is unique.
“I don’t think it would be fair to paint with a broad stroke to say all of these businesses are failing because of X, Y, Z,” LaFountain said.
The Treasurer’s Office and the Commissioner of Revenue are offering help to businesses falling behind, urging owners to reach out before the situation escalates to court.
“Going to court is a last resort,” LaFountain said. “I don’t want to seem like a schoolyard bully... but the fact is there are obligations.”
The city is also compiling a list of delinquent restaurants, which will be posted on its website soon.