Sec. 40-190. - Definitions.

The following words and phrases, when used in this article, shall have, for the purposes of this article, the following respective meanings except where the context clearly indicates a different meaning:

(1)

Caterer. A person who furnishes food, beverages or both on the premises of another, for compensation.

(2)

City treasurer. The treasurer of the City of Newport News and any of his duly authorized deputies, assistants, employees or agents.

(3)

Commissioner of the revenue. The commissioner of the revenue of the City of Newport News, and any of his duly authorized deputies, assistants, employees or agents.

(4)

Food and beverages. All food, food products, any beverage(s), including alcoholic beverage(s), or any combination thereof, purchased in or from a food establishment, whether prepared in such food establishment or not, and whether consumed on the premises or not, and without regard to the manner, time or place of service.

(5)

Person. Any individual, corporation, company, association, firm, partnership or any group of individuals acting as a unit.

(6)

Purchaser. Any person who purchases food and beverages in or from a food establishment or from a caterer.

(7)

Food establishment. Any place in or from which food and beverages, are packaged, prepared, sold or distributed in the city, including but not limited to, any restaurant, dining room, grill, coffee shop, cafeteria, cafe, snack bar, lunch counter, convenience store, movie theater, delicatessen, confectionery, bakery, eating house, eatery, drugstore, ice cream/yogurt shops, lunch wagon or truck, pushcart or other mobile facility from which food is sold, public or private club, resort, bar, lounge, or other similar establishment, public or private, and shall include private property outside of and contiguous to a building or structure operated as a food establishment at which food or beverages are sold for immediate consumption.

(8)

Seller. Any person who sells food and beverages in or from a food establishment or as a caterer.

(Ord. No. 4097-90; Ord. No. 5134-98, § 1; Ord. No. 5324-99; Ord. No. 5491-00, § 1)

Sec. 40-191. - Amount and levy.

There is hereby imposed and levied by the city, in addition to all other taxes, fees and charges of every kind now or hereafter imposed by law, a tax upon all food and beverages, purchased in the city in or from a food establishment, whether prepared in such food establishment or not, and whether consumed on the premises or not, such tax to be at a rate of six and one-half (6.5) percent on the total amount charged by the seller for the food or beverage. In the computation of this tax any fraction of one-half (0.5) cent or more shall be treated as one cent ($0.01).

(Ord. No. 4097-90; Ord. No. 5324-99; Ord. No. 5460-00, § 1; Ord. No. 5491-00, § 1; Ord. No. 5786-02, § 1)

Sec. 40-191.1. - Exemptions; limits on application.

(a)

The tax imposed by section 40-191 shall not be levied on the following items when served exclusively for off-premises consumption:

(1)

Factory-prepackaged donuts, nabs, chips, cookies, ice cream, crackers and items of essentially the same nature;

(2)

Food sold in bulk. For the purposes of this provision, a bulk sale shall mean the sale of any item that would exceed the normal, customary and usual portion sold for on premises consumption (e.g. a whole cake, a whole pie, a gallon of ice cream, etc.); a bulk sale shall not include any food and beverages that is catered or delivered or prepared for carry out by a food establishment for off-premises consumption;

(3)

Beverages sold in factory sealed containers.

(4)

Any food and beverages purchased with food coupons issued by the United States Department of Agriculture under the food stamp program or drafts issued through the Virginia Special Supplemental Program for Women, Infants and Children.

(5)

Any food and beverages purchased for home consumption as defined in the Federal Food Stamp Act of 1977, 7 U.S.C., § 2012, as amended, except hot food or hot food products ready for immediate consumption. For the purposes of administering the tax levied hereunder, the following items, whether or not purchased for immediate consumption are excluded from the said definition of food in the Federal Food Stamp Act: sandwiches, salad bar items sold from a salad bar, prepackaged single serving salads consisting primarily of an assortment of vegetables, and non-factory sealed beverages. This subsection shall not affect the provisions set forth in subparagraph (c)(3), (4) and (5) below.

(b)

A grocery store, supermarket or convenience store shall not be subject to the tax except for any portion or section therein designated as a delicatessen or designated for the sale of prepared food and beverages.

(c)

The tax imposed by section 40-191 on food and beverages shall not be levied on food and beverages sold or provided by:

(1)

Food establishments to employees as part of their compensation when no charge is made to the employee.

(2)

Day care centers, public or private elementary or secondary schools or colleges or universities to their students or employees.

(3)

For use or consumption by and which is paid for directly by the Commonwealth, any political subdivision of the Commonwealth or the United States.

(4)

Hospitals, medical clinics, convalescent homes, nursing homes, homes for the aged, infirm or handicapped, battered women, narcotic addicts or alcoholics, or other extended care facilities to patients or residents thereof.

(5)

Public or private non-profit charitable organizations or establishments to elderly, infirm, blind, handicapped or needy persons in their homes or at central locations.

(6)

Private establishments that contract with the appropriate agency of the Commonwealth to offer food, food products, or beverages for immediate consumption at concession prices to elderly, infirm, blind, handicapped, or needy persons in their homes or at central locations

(7)

Volunteer fire and rescue departments, non-profit educational, charitable or benevolent organizations, churches, or religious bodies as fund raising activities sold on an occasional basis, not exceeding three (3) times per calendar year, the gross proceeds of which are to be used by such organizations exclusively for non-profit educational, charitable, benevolent or religious purposes.

(8)

Vending machines.

(9)

Churches that serve meals for their members as a regular part of their religious observances.

(10)

Age-restricted apartment complexes or residences with restaurants, not open to the public, where meals are served and fees are charged for such food and beverages and are included in rental fees.

(Ord. No. 4097-90; Ord. No. 5134-98, § 1; Ord. No. 5491-00, § 1; Ord. No. 6610-09, § 1)

Note—Ord. No. 6610-09, § 2, provides for an effective date of July 1, 2009.

Sec. 40-192. - Same—Collection.

The tax levied by section 40-191, in each and every case, shall be collected by the seller from the purchaser at the time that the charge for the food and beverages shall be due and payable, whether such payment shall be made in cash or on credit by means of a credit card or otherwise. The seller shall separately state the amount of the tax and add such tax to the amount charged for the food and beverages, and the tax shall be paid to the city by the seller as hereinafter provided. No blind person operating a vending stand or other business enterprise under the jurisdiction of the department for the visually handicapped and located on property acquired and used by the United States for any military or naval purpose shall be required to collect or remit such taxes.

(Ord. No. 4097-90; Ord. No. 5491-00, § 1)

Sec. 40-193. - Collections held in trust.

All money collected as taxes under this article shall be deemed to be held in trust by the seller collecting the same until remitted to the city as provided in this article.

(Ord. No. 4097-90)

Sec. 40-193.1. - Deduction allowed for seller.

For the purpose of compensating a seller for accounting for and remitting the tax levied by this chapter, such seller shall be allowed three (3) percent of the amount of tax due and accounted for in the form of a deduction in submitting his return and paying the amount due by him, provided the amount due was not delinquent at the time of payment.

(Ord. No. 4097-90)

Sec. 40-194. - Reports and remittances.

Every seller shall make a report for each calendar month, showing the amount of food and beverage charges collected and the tax required to be collected, upon such forms setting forth such other information as the commissioner of the revenue may prescribe and require and shall deliver such report to the commissioner of revenue with remittance of such tax. Such reports and remittances shall be made to the commissioner of the revenue on or before the twentieth day of the calendar month following the month being reported. The tax required to be collected shall be computed by the seller at the rate set forth in section 40-191 on the total amount of food and beverage charges collected for the calendar month and remitted to the commissioner of the revenue in that amount.

Notwithstanding the foregoing provisions of this section, the commissioner of revenue shall allow reports and remittances to be made quarterly by any person collecting the tax when the person has established for a period of one (1) year that his monthly remittances are less than one hundred dollars ($100.00) per month. Such reports and remittances shall be made on or before the twentieth (20th) day of the month following the close of the period.

(Ord. No. 4097-90; Ord. No. 4873-96; Ord. No. 6252-06, § 1)

Sec. 40-195. - Gratuities and service charges.

Where a purchaser provides a gratuity for an employee of a seller, and the amount of the gratuity is wholly in the discretion of the purchaser, the gratuity is not subject to the tax imposed by this article, whether paid in cash to the employee or added to the bill and charged to the purchaser's account, provided, in the latter case, the full amount of the gratuity is turned over to the employee by the seller.

An amount or percent, whether designated as a gratuity, tip or service charge, which does not exceed twenty (20) percent of the selling price of the food and beverages, that is added to the price of the food and beverages by the seller, and required to be paid by the purchaser, is not subject to the tax imposed by this article; however, any portion of such mandatory gratuity, tip or service charge that exceeds twenty (20) percent that is added to the price of the food and beverages by the seller, and required to be paid by the purchaser is subject to the tax imposed by this article.

(Ord. No. 4097-90; Ord. No. 6308-06, § 1)

Sec. 40-196. - Advertising payment or absorption of tax prohibited.

No person shall advertise or hold out to the public in any manner, directly or indirectly, that all or any part of a tax imposed under this article will be paid or absorbed by him or by anyone else, or that he or anyone else will relieve any purchaser of the payment of all or any part of such tax. Any person who violates this section shall be guilty of a misdemeanor.

(Ord. No. 4097-90)

Sec. 40-197. - Penalty and interest for failure to remit taxes when due.

If any person whose duty it is to do so shall fail or refuse to remit to the commissioner of revenue the tax required to be collected under this article within the time and in the amount specified in this article, there shall be added to such tax by the commissioner of revenue a penalty in the amount of ten (10) percent for the first month the taxes are past due, and five (5) percent for each month thereafter, up to a maximum of twenty-five (25) percent in the aggregate, with a minimum penalty of ten dollars ($10.00), but in no event shall the penalty exceed the amount of the tax assessable. In addition, interest at the rate of ten (10) percent per annum shall be computed and collected upon the taxes and penalty beginning from the date such taxes were due and payable.

(Ord. No. 4097-90; Ord. No. 5134-98, § 1; Ord. No. 6162-05; Ord. No. 6309-06, § 1)

Sec. 40-198. - Procedure upon failure or refusal to collect, etc., taxes.

If any person whose duty it is to do so shall fail or refuse to collect the tax imposed under this article or to make within the time provided in this article the reports and remittances required by this article, the commissioner of the revenue shall proceed in such manner as he may deem best to obtain the facts and information on which to base his estimate of the tax due. As soon as the commissioner of the revenue procures such facts and information as he is able to obtain upon which to base the assessment of any tax payable by any person who has failed or refused to collect such tax or to make such report and remittance, he shall proceed to determine and assess against such person such tax, penalty and interest provided for in this article and shall notify such person by registered mail at his last-known place of address of the amount of such tax, penalty and interest and the total amount thereof shall be payable within ten (10) days from the date of such notice.

(Ord. No. 4097-90)

Sec. 40-199. - Preservation of records.

It shall be the duty of every person required by this article to pay to the city the taxes imposed by the article to keep and to preserve for a period of five (5) years records showing all purchases taxable under this article, the amount charged the purchaser for each such purchase, the date thereof, the taxes collected thereon and the amount of tax required to be collected by this article. The commissioner of the revenue or his duly authorized agents shall have the power to examine such records at reasonable times and without unreasonable interference with the business of such person, for the purpose of administering and enforcing the provisions of this article, and to make transcripts of all or any parts thereof.

(Ord. No. 4097-90)

Sec. 40-200. - Duty of person going out of business.

Whenever any person required to collect and pay to the city a tax under this article shall cease to operate and shall otherwise dispose of his business, any tax payable under this article to the city shall become immediately due and payable; and such person shall immediately make a report and pay the tax due.

(Ord. No. 4097-90)

Sec. 40-201. - Penalty for violation of article.

(a)

Any person willfully failing or refusing to file a return as required under this article shall, upon conviction thereof, be guilty of a Class 1 misdemeanor, except that any person failing to file such a return shall be guilty of a Class 3 misdemeanor if the amount of tax lawfully assessed in connection with the return is one thousand dollars ($1,000.00) or less. Any person violating or failing to comply with any other provision of this article shall be guilty of a Class 1 misdemeanor.

(b)

Each violation of or failure to comply with this article shall constitute a separate offense. Conviction of any such violation shall not relieve any person from the payment collection or remittance of the tax as provided in this article.

(Ord. No. 4097-90; Ord. No. 5134-98, § 1; Ord. No. 5323-99)

Sec. 40-202. - Duty of city treasurer.

The city treasurer shall have the power and the duty of collecting the taxes imposed and levied hereunder and shall cause the same to be paid into the general treasury for the city.

(Ord. No. 4097-90)

Sec. 40-202.1. - Duties of commissioner of the revenue.

It shall be the duty of the commissioner of the revenue to ascertain the name of every person operating a food establishment in the city, liable for the collection of the tax levied by this article, who fails, refuses or neglects to collect such tax or to make, within the time provided by this article, the reports or remittances required in this article.

(Ord. No. 4097-90; Ord. No. 5324-99)

Sec. 40-203. - Severability.

The provisions of this article are hereby declared severable. If any part, section, subsection, provision, sentence, clause or phrase, or the application thereof to any person or circumstance, is for any reason judged unconstitutional or invalid, the remainder of the article shall remain in full force and effect and its validity shall not be impaired, it being the legislative intent now hereby declared that this article would have been adopted even if such invalid matter has not been included in it, or if such invalid application had not been made.

(Ord. No. 4097-90)

Secs. 40-204—40-209. - Reserved.