City restaurateurs question tax details
Several Pittsburgh restaurateurs complained to City Council on Wednesday that a system to collect several new taxes is unfair to them.
The city is requiring businesses to use the amount of their payrolls from the final quarter of 2004 to determine how much they must pay in the first quarter of this year on the new 0.55 percent payroll tax.
The restaurant owners say the busiest time of year for businesses such as restaurants typically is the final quarter, which means they will be overpaying for the first quarter.
"I have no problem paying the (payroll) tax to help our city, but to have it based on the fourth quarter of 2004 is ridiculous," said Jeff Cohen, owner of the Smallman Street Deli in the Strip District.
Kevin Joyce, owner of The Carlton in One Mellon Bank Center, said the city should be collecting the tax on actual payroll -- be it monthly or quarterly.
Even using the payroll amount from the first quarter of 2004 would be preferable to the current system because it is more reflective of actual costs, said Joyce, vice president of the Pennsylvania Restaurant Association.
"Why should anybody have to pay more than they actually owe?" Joyce asked after yesterday's council meeting. "It seems to me that city government ought to be doing things to make the city more attractive to businesses instead of finding ways to whack them at every turn and drive them out."
The business owners also questioned why people who are exempt from the new $52 a year emergency services tax -- those who make $12,000 a year or less -- have to wait until the end of the year to apply for a rebate.
"It doesn't seem very fair for employees who are already making relatively little money to have the whole $52 taken out of their check at one time and then wait until next year to apply for a refund," said Glenn Hawley, owner of the Monterey Bay Fish Grotto in Mt. Washington and president of the restaurant association. "I think it would make a lot more sense if we could take it out of their checks quarterly."
City Council President Gene Ricciardi said he and other council members repeatedly raised concerns about the tax collection timeline when the plan was being crafted by Mayor Tom Murphy's administration late last year.
"I think we're now seeing what I and other members of council have said many times in the past: A lot of the details in this tax-reform package are very suspect," Ricciardi said.
Craig Kwiecinski, the mayor's spokesman, said the city's lump-sum collection of the $52 tax was mandated by the state Legislature when the tax was approved in December.
"We had a full vetting of these issues when representatives of our finance department appeared at a public hearing before City Council late last year," he said.
The city's finance office did not return several telephone messages seeking comment.