WHEELING - City leaders have reported few problems in implementing Wheeling's new 0.5-percent sales tax, which officially went into effect Tuesday.
Retailers around the city are now charging the additional half-penny on the dollar for most goods and services, excluding gasoline, vehicles and unprepared food. This, combined with West Virginia's 6-percent sales tax means shoppers are now paying a total of 6.5 percent in sales tax within Wheeling city limits.
According to City Manager Robert Herron, the transition has been relatively smooth.
Photo by Ian Hicks
Wheeling’s new 0.5-percent sales tax is reflected on this receipt from a Friday purchase at a local business. Prior to Tuesday, the tax on this $3.58 purchase would have been 21 cents.
"There were a few businesses on the first day that were unaware" of their obligation to collect the additional tax, Herron said. "They were supposed to be notified by the state Tax Department."
He said he had no way of knowing whether those businesses did not receive notifications or simply ignored them.
The Wheeling Area Chamber of Commerce helped out by sending additional notifications and reminders to its members, Herron said. Chamber President Terry Sterling said he has yet to hear any negative comments on the tax from the business community.
"We got, I think, three phone calls from three of our members regarding the effective date. ... From my perspective, I think the city did a very good job explaining the tax and how the money would be used," Sterling said.
Those uses - offsetting a corresponding reduction in Business and Occupation tax that will begin in April, completing needed capital projects and funding planned improvements to WesBanco Arena - won't be seen immediately, however. The state Tax Department generally collects sales taxes from retailers on a monthly basis, but remits them to the city only quarterly, so Wheeling won't receive its first revenue check from the tax until January. Also, businesses classified as "catalog" retailers won't be charging the tax until January, as state law requires a longer notification period for such businesses.
City leaders expect to pull in an additional $1.4 million in annual revenue each year from the sales tax, but Herron said he would prefer to see more sound data before spending that money. The city projects are -receiving only about $1.1 million from the new tax this fiscal year, due to the three-month lag in receiving its first revenue payment and the delayed implementation of the tax for catalog retailers.
For those reasons, Herron noted, the city opted to wait until next spring to complete its planned street paving. The plan is to return to the normal fall paving schedule, possibly as soon as next year.
According to Herron, the city received five responses to a request for quotations for design work on the arena renovation project. It's estimated to cost up to $4 million, and could include additional convention space at or near the existing venue.
Herron expects to present those design proposals to City Council in December, but said the city likely wouldn't enter into a contract before January, when officials expect to receive the initial sales tax revenue payment. Construction work likely wouldn't begin until sometime next summer, he noted.
"We won't move forward with any type of major project until we have two quarters of history," Herron said.
City Council voted to enact the tax in June, exercising one of its additional powers under West Virginia's Municipal Home Rule Pilot Program. Huntington and Charleston also have enacted municipal sales taxes, with the latter's also going into effect Tuesday.
Wheeling Mayor Andy McKenzie said the sales tax will make the city more competitive by allowing it to reduce the B&O tax on businesses.
"Now we can compete with Ohio more by reducing the burden on business but still having a lower sales tax than Ohio does," McKenzie said.