B&O tax battle to continue in Weirton, WV, despite council's vot - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

B&O tax battle to continue in Weirton, WV, despite council's vote

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Weirton City Council has passed the controversial business and occupation tax, but before the city can begin reaping the benefits of the additional revenue, it will have to stave off a legal challenge from the business community.

Council voted 3-2 Tuesday, July 1, to implement the tax, applied to gross receipts. Businesses are grouped into categories, each with a pre-established triggering threshold. The actual tax percentage, like the triggering threshold, varies by category.

The tax is expected to generate about $2 million a year, though that's just an estimate. City officials said they'll need to chart the numbers for a full quarter before they know how accurate their projection is.

The business community, however, insists a B&O will deter new business development as well as expansion and retention of existing businesses. Several of its members had sought a court order prohibiting council from voting on the measure, but their petition was dismissed because Ohio County Circuit Judge David Sims said he couldn't issue an injunction "based on something that wasn't voted in yet."

Sims, however, left the door open for the suit to be re-filed.

J.J. Bernabei, owner of a pharmacy and medical products business in Weirton and also one of the principals in a development venture, said if nothing else, council's vote clears the way for that to happen.

"We'll definitely re-file," he said. "I definitely believe the way we got to this point was flawed, it's definitely taxation without representation."

The original complaint, filed in Hancock County Circuit Court by Bernabei and Rick Stark of OceanAir/Startrans International, claimed the city violated the rights of businesses and residents in the First Ward by bringing the B&O to a vote while their seat on council was vacant.

In May, Mayor George Kondik cast the tie-breaking vote to defeat the B&O after council had deadlocked at 3-3. But after that vote, First Ward Councilman Ron Jones was forced to tender his resignation because he'd moved outside the ward. Without Jones' vote, the pro-B&O voting block was able to reintroduce and pass the tax.

But the second reading was heard a week before council's next regularly scheduled meeting on July 7, at which Kondik "is hoping" they'll be in position to select a successor to Jones.

Bernabei insists that to order to ensure victory, the B&O supporters rushed the tax to a vote before the vacancy could be filled.

"They constructed the vote to avoid losing," he alleged.

The original complaint also criticized the B&O as being "unconstitutional and arbitrary and capricious in that the taxation system creates certain classes of businesses that are taxed, certain classes of business that are not taxed and certain classes of business that are taxed at higher rates with no rational basis."

City officials, however, say they built "very liberal exemptions" into the tax that businesses must exceed in gross receipts before the tax kicks in. Officials also signaled their willingness to roll back the city's police and fire service fee.

Likewise, the officials also said they will pursue a sales tax if and when the city achieves Home Rule status. Under Home Rule, a sales tax is allowed only if a municipality reduces or eliminates its B&O. But, since the sales tax wasn't listed in Weirton's home rule application, the Home Rule Board would have to approve the change.

City officials are slated to make their pitch to the state's Home Rule Board on Aug. 11 in Wheeling. Weirton will be one of four communities in the region — the others are Parkersburg, Vienna and Moundsville — on the board's agenda.

But there are a total of 23 communities vying for 20 open slots, and they, too, will be meeting with the board over the next two months: Bluefield, Lewisburg, Oak Hill and Princeton — July 7; Dunbar, Milton, Nitro, St. Albans and South Charleston — Aug. 4; Buckhannon, Clarksburg, Fairmont, Morgantown and Shinnston — Aug. 25; and Bath, Berkeley Springs, Charles Town, Martinsburg and Ranson — Sept. 8.

Kondik admits that convincing the Home Rule Board to allow them to amend their application before they're even accepted into the program could be tricky. 

"It's very unusual," he said. "It's never been done before."