Ashland won't tax market vendors until 2015
ASHLAND — In a 4-3 decision, the Ashland City Council Tuesday night voted to defer enforcement of the city's longstanding food and beverage tax on vendors at the Rogue Valley Growers and Crafters Market until 2015.
"It's really a 51-49 decision for me," said Councilor Dennis Slattery. "If I thought the spirit of the people selling there was to cheat the tax, I'd feel different about it."
The city hadn't made any effort to enforce the tax for the more than 20 years the market has been in existence, and vendors had been under the impression it didn't apply to them. But this summer, the city received a complaint from a brick-and-mortar restaurant, whose proprietors said it was unfair that the 5 percent tax was only being collected on their ilk.
When the city sent letters to the market this fall, asking vendors to pay up, City Administrator Dave Kanner says vendors made no attempt at compliance. At the council's Dec. 2 meeting, many vendors balked at paying a tax that was variously described as unprofitable, when collected from vendors only in operation a few hours a week, and unfair, when those vendors were excluded from doing business in the downtown core.
Market President Monica Rey had asked the council at the last meeting to wait until the new year to begin collection of the taxes, arguing that it was unfair to collect taxes retroactively from vendors who hadn't known the tax applied to them.
"In the interest of keeping the peace," Slattery said Tuesday, "this is the way we should go."
Councilor Rich Rosenthal Tuesday asked city Finance Director Lee Tuneberg what options the city had for collection of back taxes on vendors. It's complicated, Tuneberg explained. Because the vendors haven't been collecting the tax and keeping records of it, the city would basically be forced to guess, and would have to use an appeals process if the vendors claimed the estimate was too high.
Then, there's the issue of identifying all the vendors who fall under the tax. Under the market's current operation, the market itself obtains one business license that covers all the vendors. "Because of (the individual vendors) not coming to our counter and getting a business license, we don't know that they're out there," he said.
Rosenthal, along with Mike Morris and Greg Lemhouse, said they weren't following that line of thought.
"I resist the notion that, somehow, the city should be taking responsibility for people who are in business who should know the rules," Rosenthal said. "I'm going to vote against this because I feel it's unfair to the law-abiding businesses."
Lemhouse said the vendors' defense that they had been given incorrect information about the rules suggested there were management issues with the market itself that needed to be addressed.
Councilor Pam Marsh, along with Mayor John Stromberg, pointed out that there was a tremendous amount of confusion on all sides about the issue, with no definitive answer. It would be better, Marsh said, to start fresh in 2015.