Elkins may look to annexation, not sales tax

ELKINS — A group of downtown business owners came to the Elkins City Council Revenue Committee meeting Thursday to protest against a possible new city sales tax, but were surprised when the Committee discussed the idea of annexation as a way of avoiding a new tax.

Hoping to raise sagging tax revenue, Elkins officials are looking at creating a 1 percent sales tax on businesses, which is possible now that the state has approved the city’s application to amend the original Home Rule plan for Elkins.

Brenda Jackson spoke at the start of Thursday’s meeting, representing Trickett’s Hardware, which has been in downtown Elkins since 1923.

“Business has never been as bad as it is right now,” Jackson said.

“This was called a ‘tourist tax,'” she said. “I don’t have tourists. All I have is loyal customers… and if you put a tax on them they’ll probably pass me by.”

“It may cause some businesses to leave altogether,” Jackson said.

Tammy Dolly, of the Delmonte Market, said she would prefer for Elkins to raise its B&O tax rather than create a sales tax.

“If I have to charge them 1 percent above sales tax, they feel that,” she said. “We don’t have to give people one more reason to not shop in downtown Elkins.

“We’re doing everything we can to bring people into downtown Elkins,” Dolly said. “I don’t think this will help us.”

Kathy Vance, owner of Kathy’s Decorating & Design, pointed out that a new Elkins sales tax would also be an added headache for the state.

“You’re sending this 1 percent to Charleston for them to collect,” Vance said. “I personally know there are businesses in town who don’t pay their consumer sales taxes. So therefore we’re putting that hardship on the state to try to collect that money, but the city would be receiving the money. Is it right to put that hardship on the state?”

City Attorney Gerry Roberts said the state takes an administrative fee — currently set at 2 percent — out of collections of a city’s sales tax revenue, and the rest is sent to the city.

She also pointed out that in order for a city to create a sales tax, it must eliminate “some form of” a B&O tax. “You can’t have them both,” she said.

Roberts noted that Grafton’s sales tax went into effect in July 2016. She said a Grafton city official told her the first check from the state was minimal, and that the check amounts have gradually increased over time.

Committee member Robert Chenoweth, a First Ward councilman, said, “I would be more comfortable with just the B&O tax” if Elkins could annex Wal-Mart and some of the other businesses along the Beverly Pike 5-lane.

Other city officials at the meeting agreed those businesses could possibly be annexed into the city through minor boundary adjustments.

“We should investigate that,” Chenoweth said. “Wal-Mart is a game changer.”

City Treasurer Tracy Judy said the Elkins Wal-Mart is one of the only ones in West Virginia that is not located within a town’s city limits.

Mayor Van Broughton said he’d spoken to a Wal-Mart district manager in recent years about the annexation issue.

Judy asked the business owners at the meeting if they would support the city’s annexing businesses on the 5-lane instead of creating the sales tax.

“That would change things for me,” Dolly said.

“Absolutely,” Vance added, and the other business owners present agreed.

Broughton and Revenue Committee Chairman Charles Friddle agreed to meet with Wal-Mart corporate officials and report back at the next Committee meeting, which will be at 5:30 p.m. Sept. 21 in room 212 of City Hall.