ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, January 5, 1996 TAG: 9601050062
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: DAN CASEY STAFF WRITER
NOTE: Above
The city of Roanoke is demanding that the Roanoke Valley's largest cable television provider pay more than $250,000 in gross receipts taxes and penalties that the city says have been accumulating for years.
But Cox Communications hasn't conceded the money is due, and the matter could be headed for court.
The years-old squabble concerns whether the company has to pay Business, Professional, and Occupational License taxes, as most other businesses do.
Cox already collects a franchise fee from cable customers and turns it over to the city, Roanoke County and Salem.
So far, City Council has discussed the matter only in secret, as it is allowed to do because it involves "probable litigation." Cox, too, is holding its cards close.
But a city government source said the dispute involves overdue taxes dating back to at least 1992. Cox moved to its new county headquarters near Tanglewood Mall in August 1994 and wouldn't be liable for city BPOL taxes after then.
Council met behind closed doors Tuesday to discuss the city's efforts to collect the tax.
City Attorney Wilburn Dibling declined to comment on specifics of the case. But he said nothing in Cox Communications' franchise agreement with the city exempted Cox from paying BPOL taxes.
Mayor David Bowers also declined to comment, calling the matter "privileged and confidential."
But Councilwoman Elizabeth Bowles said Wednesday that Cox should pay because BPOL taxes are separate from franchise fees.
"They have been billed each time, and they have ignored it," she said. "I certainly hope it will not go to court. I think when they get the final statement from our attorney, they'll realize they owe it and pay."
"We think the franchise fee only gives them the right to use the streets and the poles and right of way" for cables, she said.
General Manager Gretchen Shine said Cox and the city have discussed the issue for several years. But, she said, "I'm not familiar with any current effort to collect any amount of money for BPOL taxes."
Cox did not pay BPOL taxes while it was headquartered in the city, and it doesn't pay them to the county now, Shine said.
"I think that's a discussion the city and Cox need to have, so I'm very reluctant to talk to you about it," Shine said. "We're a good corporate citizen, and we currently pay in excess of $1 million in franchise fees to the city of Roanoke, Roanoke County and Vinton."
Other utilities in the city - such as Roanoke Gas, American Electric Power (formerly Appalachian Power) and Bell Atlantic - pay BPOL taxes. They also collect utility taxes from customers and turn the proceeds over to the city.
State law gives the city several options to pursue in collecting overdue taxes, Dibling said: It can placing a lien on the taxpayer's property; take state tax refunds due the taxpayer; or, more rarely, seize a taxpayer's property and sell it to satisfy the taxes owed.
The city isn't the only jurisdiction considering the BPOL-cable question. Wayne Compton, Roanoke County's Commissioner of Revenue, also is seeking legal advice on whether he can collect BPOL taxes from the cable company.
Compton said he thinks state law allows him to collect the tax. County Attorney Paul Mahoney said he would prefer to wait and see how the dispute with the city is resolved.
"When [Cox was] moving to the county, the information I had led me to believe they weren't responsible for it," Compton said. ``As time went by, I came to the conclusion that I need to take a second look at this.''
Many cities, counties and towns around the state don't assess BPOL taxes against cable providers. But many others, such as Manassas, Lexington and Harrisonburg, do collect the tax.
The tax is levied on the gross receipts a company takes in. The maximum BPOL rate the state allows localities to collect from cable companies is 36 cents per $100 of revenue.
The business community has complained for years that the tax is unfair because it's levied on gross revenues, rather than profit. Thus, a money-losing business would still be liable for the tax.
An attempt by Gov. George Allen last year to phase out BPOL taxes died in the General Assembly after stiff opposition from local governments. Allen's proposed legislative package for this year leaves BPOL untouched.
LENGTH: Medium: 81 linesby CNB