Williamsburg wants internet-based businesses to pay their fair share of taxes

Contact Reporterwwright@vagazette.com

When the General Assembly convenes in Richmond in January, Williamsburg city leaders want to make sure area representatives understand the city's priorities.

State Sens. Monty Mason and Tommy Norment, Delegate-elect Mike Mullin, Congressman-elect Scott Taylor and Congressman Rob Wittman, met with city council members Monday for a wide-ranging discussion.

State budget shortfall

Virginia is looking at a budget shortfall of around $861 million. Gov. Terry McAuliffe has asked every state sector to expect a 7.5 percent cut.

The original suggestion was 5 percent and excluded higher education.

The most recent recommendation includes higher education but excludes economic development.

McAuliffe said that Virginia may not cut as drastically as once thought. He'll reveal his proposed budget on Dec. 16.

Higher education cuts worried Norment, who knows schools are preparing for the next academic year.

"I'm against that," he said. "I think there are other ways we can do it."

City staff named education, transportation, and public safety among its areas of greatest financial importance.

Mayor Paul Freiling said that Virginia's budgetary responsibilities may preempt any of their wishes.

"We realize the realities of the situation," he said. "There are pressures on all areas of spending."

Internet-based businesses

Internet businesses like Airbnb do not pay as much in taxes as Williamsburg-based businesses. The city wants the power to regulate how businesses like that operate in its area.

Norment lived next to a family who opened up their home using Airbnb. He said visitors from New Jersey enjoyed the same amenities he pays for without paying the requisite taxes.

"I was mildly annoyed by that, to put it lightly," he said.

Norment said there have been $3.3 billion in internet sales around the nation. When people buy online, he said, they avoid sales taxes.

"We've got to find a way to close that gap and make sure these tax dollars come back to these localities," said council member Doug Pons.

Mayor Paul Freiling spoke about Airbnb specifically.

"We're not opposed to short-term rentals," he said. "We're opposed to the idea that we can't protect some of our neighborhoods."

There was concern from council members about how AirBnb in particular could affect some of the city's residential neighborhoods.

"Our concern is making sure that in allowing this new opportunity, we don't forget the character of the city," said city attorney Christina Shelton.

The hotel industry, Norment said, might not see a sizable effect since it offers a different experenice.

A hotel gives buyers a private room, but Airbnb users generally stay with a family in the family house.

"I don't hide it — I've got an interest in some hotel properties. I don't see it hurting us," Norment said.

Mason says the shared economy, which describes people borrowing or renting assets owned by someone else, will force localities to adjust.

Monty Mason, a senior director at VISA, said his employer gives out small perks to people who use Uber. He said money could become tighter as that and similar services become more commonplace.

"As that shared economy expands, localities are going to lose revenue," he said. "That will put pressure on local elected officials."

City council members said the state should allow localities to require an application, public notice, and approval process.

A work group of politicians met in July about how the state could regulate Airbnb. They did not make any recommendations, but they heard from business owners and residents from around the state.

Group homes

The city wants at least 90 days notice for group homes entering the area. If it's within 2,500 feet of a primary or secondary school, the city wants the state to make sure the group home has no residents who pose a threat.

Both would address issues council had when two group homes opened this year.

"I don't understand the lack of notice," Norment said. "I don't see how that comports with the therapeutic methods they are going for."

Mason said that the crux of the issue is making sure that people leaving mental hospitals can find a place to transition.

"We've got a big-time issue," Monty Mason said, noting that Eastern State is 99 percent full.

"We've got to find solutions here," he continued. "These people aren't a part of anyone's natural constituency. If we don't help people get back on their feet, who will?"

Wright can be reached at 757-345-2343.

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