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FOOD AND BEVERAGE TAX City of Ashland: growers market vendors must pay tax Market asks for delay to 'begin fresh' Comment By John Darling for the Mail Tribune MailTribune.com By John Darling for the Mail Tribune Posted Dec. 1, 2014 at 12:01 AM By John Darling for the Mail Tribune Posted Dec. 1, 2014 at 12:01 AM » Social News For more than two dozen years, vendors at the Rogue Valley Growers & Crafters Market operated under the market’s business license, didn’t pay Ashland’s 5 percent food and beverage tax on prepared food and didn’t think they had to. But now, the city says they have to pay. Letters from City Administrator Dave Kanner to the market have asked for payment for the last 10 weeks, since the city first notified vendors. The market and vendors are asking the city to wait on enforcement of the tax until 2015, giving vendors a chance to start keeping records and charging customers for the tax. Kanner has proposed two alternatives — pay taxes for the last 10 weeks or wait till next March (when the market re-opens) to start the system. The City Council will consider the options during its meeting at 7 p.m. Tuesday at 1175 E. Main St. Market board members plan to be there and are encouraging vendors to come and testify. The city received a complaint about nonpayment of the tax, Kanner said, so it sent out what he called two “secret shoppers” to document that vendors were not charging the tax. The city on Sept. 5 sent letters to vendors demanding payment from the date of the letter onward. “We were unaware of it (liability for the tax) because we were under the business license of the growers market,” said June Altunel, co-owner of Sultan’s Delight, a mobile kitchen for eastern food based in Talent. Five percent of her sales would be about $15 a day, amounting to $150 for the 10-week period this year, she said, though she didn't keep records. “Some days, when it’s raining, we barely make it. The tax is a hardship,” she said. “We didn’t charge that tax, ever. We didn’t charge their little secret shoppers. We’ll just have to raise our prices.” Growers market General Manager Marcella Bell said she and vendors accept the tax is inevitable but feel it’s only fair to start afresh on the new season when everyone understands the rules and customers can be charged for it. “We didn’t realize we were liable and none have collected it,” Bell says. “We’re asking that it start in 2015 when we know all the details and can keep track. None of us feel it’s fair.” Senior Market Manager Mary Ellen De Luca said, “It works by charging the customer. The vendor isn’t holding that money now. They only work here five hours a week. Most aren’t bricks-and-mortar stores. It only makes sense to inform people and begin fresh.” The market was started by area growers in 1987 and is a mutual benefit corporation under state law, said De Luca. Oregon considers such organizations to be nonprofits, according to the Oregon attorney general’s website. The market was not set up for profit and only pays expenses and salaries, De Luca said. It plans to file for 501(c)(3) status with the federal government. Kanner said the food and beverage tax is being applied to vendors, not the market. The city ordinance makes no reference to who holds the business license. “That’s irrelevant,” he said. During an exchange of letters this fall, the city asked for a list of vendors who sold prepared food at the market this year. Until recently, the market failed to provide the list, instead asking the city for deferral of the tax to next year, said Kanner in a memo to the council. At a Nov. 3 study session, the council seemed equally divided on the two choices, he said. Kanner’s memo listed arguments for each option. In favor of immediate enforcement, it said: • Postponement might seem to be playing favorites; • Shows city enforces its laws; • Businesses are responsible for knowing the law, without having to be notified; • Lack of awareness does not excuse non-compliance; • Vendors acknowledged they are subject to the tax when it was enacted in 1993; • Lack of enforcement perpetuates “corrosive notion” that citizens only have to comply with laws when they're brought to their attention. In support of postponement of the tax, Kanner said: • Vendors likely didn’t keep records at the market, so it will be hard to determine what they owe. In any case, it’s a “minimal amount” of money; • If vendors didn’t know they owed the tax, back payment would be “punitive rather than corrective”; • Only two of nine vendors got notice of non-compliance, so it’s “not fair” to seek compliance from only two; • The vendors may not be able to pay because they weren’t aware of their liability; • The city hasn’t enforced the tax with market vendors, so the city “bears some culpability” in the situation; • Citizens may view the city as “cold-hearted and intransigent.” Kanner told the council that unless it rules otherwise, staff will enforce the tax with vendors starting from Sept. 5. Contact Ashland freelance writer John Darling at [email protected] .     By John Darling for the Mail Tribune MailTribune.com By John Darling for the Mail Tribune Posted Dec. 1, 2014 at 12:01 AM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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