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Stores outside city charging new tax

ELKINS — Several stores along the Beverly Five-lane are charging customers the city of Elkins’ new 1 percent municipal sales tax — despite the fact that these stores are located outside Elkins city limits.

Elkins City Clerk Jessica Sutton said Thursday that she has been in touch with the West Virginia State Tax Department about the problem.

“It came to our attention on Tuesday of this week and we started to see some social media posts about it,” Sutton said during an Elkins City Council Revenue Committee meeting Thursday. “Councilwoman (Linda) Vest came to me and said she had heard some things about it.”

Sutton says she doesn’t think the stores outside city limits charging the new tax were asked to do so by any government body.

“We were required to submit a substantial amount of information to the Tax Department” before the sales tax went into effect July 1, she said. “One was a map similar to that map of the municipal boundaries. … The zip code for Elkins is 26241, and then you have the four-digit identifiers on the end. Those identifiers are pretty specific… So I had to go through every four-digit identifier that was attached to the 26241 zip code and determine whether they were inside or outside city limits. And all that information was provided to the tax department.

“I don’t believe those businesses — they certainly weren’t contacted by the city, and I don’t believe they were contacted by the state Tax Department and told ‘you’re supposed to be collecting this tax,'” Sutton said.

The Tax Department plans to take action on the matter, she said.

“So I spoke with a (Tax Department) representative today and made her aware of what was happening, informed her that four businesses that I was aware of, and it has been confirmed by receipts, have been charging incorrectly,” Sutton said. “And she is going to have audit clerks speak with them directly and tell them to stop charging it.”

“The ones that I’ve been able to verify are the bigger chain stores that have corporate offices that aren’t in Elkins or probably not even in West Virginia, and that somehow those corporate offices were under the impression that, because they have a 26241 Elkins address, that they were required to pay the tax.”

Sutton did not name the four businesses, but employees and readers of The Inter-Mountain have collected receipts showing 7 percent tax being charged on goods from four stores along the Five-lane: Dollar Tree, Big Lots, Dunham’s Sports and Advance Auto.

“As far as any refunds to consumers, that’s kind of on the consumer, unfortunately,” Sutton said. “There’s a form on the West Virginia Tax Department’s website they can complete and submit and ask for a refund. The city doesn’t have any authority to demand anything of these businesses because they’re not in the city. So the best thing we can do is try to reach out to them and work with the Tax Department and try to remedy this as quickly as possible.”

Sutton stressed that this kind of situation has happened before in other parts of the state.

“This is not the first time this has happened,” she said. “They had a much more serious problem in Martinsburg when they imposed their municipal tax, which is why they try to be as careful as they can, the Tax Department anyway, and they’re very meticulous about the zip codes.”

Sutton said if citizens find that other stores outside Elkins city limits are charging the 1 percent tax they should “let me know and I’ll email (the Tax Department representative) directly and we’ll take care of it,” Sutton said.

The Inter-Mountain contacted the office of West Virginia Secretary of State Mac Warner about the situation Thursday.

“A business located outside of Elkins is not permitted to charge the additional tax,” said Michael L. Queen, the deputy chief of staff and director of communications for the office, in an email Thursday.

Queen expressed curiosity about where those stores would send the sales tax funds they have charged customers.

“It would be interesting to see to whom they are remitting the 1 percent,” Warner said, and encouraged consumers who have been charged the tax by the stores outside city limits to file a complaint.

“A formal complaint via email should be filed with the city of Elkins as well as with the secretary of Tax & Revenue,” Queen wrote.

Elkins City Council voted 7-3 to pass the controversial new tax in December, creating a 1 percent sales tax on businesses within the city limits, which became possible once the state approved the city’s application to amend the original Home Rule plan for Elkins.

City officials have declined to earmark how the sales tax revenue will be spent.

The city of Elkins’ budget for this fiscal year estimates that a quarter of a million dollars of revenue will be brought in by the new 1 percent sales tax.

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