By Ann Marie Shambaugh
Some diners in Whitestown have been paying a tax that shouldn’t exist, and town officials are urging the Indiana Dept. of Revenue to resolve the problem and find out how it happened.
Whitestown Town Manager Dax Norton said at least four Whitestown restaurants have been charging Zionsville’s 1 percent food and beverage tax. Whitestown does not have that tax, so its businesses should only be charging 8 percent tax on restaurant sales.
Norton said the town became aware of the issue several weeks ago when a resident brought in a receipt from Caplinger’s Fresh Catch that showed a 9 percent sales tax charge. Since then, the town has verified that at least two or three other restaurants are likely charging the tax. Buffalo Wild Wings was also charging the tax but appears to have remedied the situation, Norton said.
Norton believes the confusion is likely caused because many Whitestown restaurants have a Zionsville address. Adding to the confusion, he said, is when the Zionsville Chamber of Commerce – of which that business is a member – holds a ribbon cutting to welcome the new business to town.
“When you have a Zionsville address, the Zionsville Chamber of Commerce has come to you and said ‘Welcome here,’ you get a form from the department of revenue that says collect Zionsville food and beverage taxes, your brain doesn’t kick in to go, ‘I’m a Whitestown business. Why would I collect that?’” Norton said.
Norton said town officials notified the department of revenue of the problem in mid-August and that the person they spoke with was unaware of the situation.
“(The first thing) we requested is to just make it stop, period,” Norton said. “Per our continued investigation in the matter it hasn’t stopped everywhere.”
Town of Zionsville Deputy Mayor Ed Mitro said Zionsville officials have been aware of the situation for months and has been working with state officials to determine exactly which businesses have been incorrectly charging the tax.
“Our director of finance and records has been working with the state to try to obtain a listing for months now,” he said. “The state is actually the entity that will need to correct it once we know for sure who is or isn’t paying what. It is nothing that either Zionsville or Whitestown can correct on its own, but we are doing what we can to help. The border of Zionsville and Whitestown in that area is confusing.”
Emily Landis, IDR director of external communications, confirmed that IDR is working with both towns to resolve the problem.
“We are aware of the issue and working to gather facts in order to address a solution and process for future transactions,” she said. “Representatives from both city areas are equally as eager to get this problem resolved to ensure taxes are properly collected and distributed.”
Norton said he has no idea how much money has inadvertently been collected for Zionsville’s food and beverage tax in Whitestown.
“It’s not a Zionsville issue. Let’s make that very clear,” Norton said. “The only issue Zionsville would have is if the department of revenue is going to take money away from their food and beverage account.”
As of press time, she did not state whether there is a process for taxpayers who paid the 1 percent tax that wasn’t supposed to be charged to get their money back.
This story will be updated.