For every item of prepared food and/or beverage sold, a 6% meals tax must be collected from the end-user and paid to the City of Fredericksburg in addition to the sales tax collected for and paid to the Commonwealth of Virginia. A tax registration form (PDF) is required.
A monthly reporting form must be completed and signed indicating the amount of the food and beverage charges collected and the tax due to be remitted. These taxes are "trust taxes" meaning that they are being held in trust until remitted to the City of Fredericksburg. If a monthly form (PDF) is filed and paid by the 20th of each month, a discount is allowed to compensate for the time and costs associated with collection and remittance of this tax. The discount is 3% of the tax due or $100, whichever is less. Payments received after the due date will not be allowed this deduction and will be subject to penalty and interest.
The Code of the City of Fredericksburg now prohibits a business from obtaining a business license if they are not current on all other taxes (including but not limited to business tangible personal property taxes, meals, and admissions taxes and prior business year license taxes). Failure to obtain a business license is now punishable by a class 3 misdemeanor.
Calculating Meals Tax Example
ABC Restaurant sells $1,000 of food and beverage during the month of January. The meals tax is due by February 20th. The amount due is calculated below: $1,000 x 6% = $60 less the 3% discount ($60 x 3% = $1.80) = $58.20 meals tax due
DEF Restaurant sells $100,000 of food and beverage during the month of January.
$100,000 x 6% = $6,000 less the discount capped at $100 ($6,000 x 3% = $180, but $100 is total discount allowable) = $5,900 meals tax due
Discount is only allowed for timely filed and paid forms. Forms received after the 20th of the month will not be allowed the discount and will be charged a 10% penalty in addition to accruing interest at the rate of 10% per annum.