City Council to Suspend Dining Tax and Transient Lodging Tax Penalties

The Alexandria City Council will suspend the city’s dining and transient lodging taxes in response to the COVID-19 pandemic.

City staff said at an emergency meeting last night (Wednesday) that they will present the Council with legislation to not penalize businesses for not paying their dining tax and/or transient lodging tax, and would then work out a payment plan for missed months at a later date.

“At the end of April, for example, you might say we are going to waive penalty and interest on those two months,” City Manager Mark Jinks explained to Council [which had three members call-in to the meeting]. “And then we’ll work out a payment plan for the rest of the year on those two months. But then once, whatever month it is we get back up and running, those taxes ought to be paid on time, so we don’t have a penalty.”

On Saturday, the city declared a state of emergency over the pandemic. There are four positive cases in the city and one Alexandria resident infected in New York City.

Jinks said that the losses will be considerable.

“The dollar loss of the sales tax is $2.5 million a month just in earnings,” Jinks said. “Grocery stores are bringing in sales tax, but clearly restaurants are part of that, hotels are part of that. Transient occupancy is $1 million a month, and restaurants [bring in] $2 million a month.”

Mayor Justin Wilson said that the COVID-19 pandemic is “surreal”, and that federal and state support will be important in dealing with the days ahead.

“I have gotten an enormous number of requests from residents and businesses for all kinds of different needs, that exists in the community,” Wilson said. “These are serious, significant needs and we just simply do not have the capability to do this. That all being said, there are things we can do. There are things we should do and we need to do them quickly.”

On Saturday, the Council also approved the allocation of $100,000 in matching emergency funds to the ACT Now COVD-19 Response Fund with a goal of raising $200,000 so that nonprofits in the city can apply for and receive grants. The fund was established during the shutdown of the federal government in 2018, and more than $57,000 was distributed to eight organizations and more than 200 people were served, according to the city.

“I’ve heard from business owners who are in tears, quite honestly, concerned about the future of their business and the future and the welfare of their employees,” Wilson continued. “Folks are stepping up in so many different ways to help out our fellow residents, and that’s what this community is all about. And unfortunately, we’re just getting started.”