PORTERDALE -- The City Council declined Tuesday night to waive penalties levied against the Elks Club Lodge for nonpayment of city excise taxes.
In a brief discussion of the Elks Club's request for leniency at the Tuesday work session, City Attorney Tim Chambers explained to Elks Club Trustee Chairman Ray Edwards that under the city's ordinance there could be no relief for the tax penalty.
The Elks Club owes the city three years worth of excise taxes on mixed drinks sold at the lodge on Crowell Road, plus the penalty. The tax is 3 percent and the penalty is 1.5 percent.
Edwards petitioned the council for a waiver of the penalty, saying that the Elks Club never knew it owed the city excise tax.
"And you're saying that there's nothing that can be done at all (regarding the waiver)?" Edwards asked Tuesday night.
"That's correct," replied Mayor Arline Chapman.
Edwards also asked if the city would consider reducing the $2,500 pouring license fee for the lodge.
"We can't do that unless we would lower it for everyone," Chapman said, adding that there is no exception in the city ordinance for private clubs and no provision for reduced license fees.
Elks Club Trustee Reed Blakeney told the council that he believes it is a "gross mistake" to consider the Elks Club Lodge the same as a bar or a nightclub. He said that the lodge was not informed of the city excise tax and the members are unhappy with the city's position on the penalty issue.
"These things were not explained to us, and we are very upset," he said.
Contacted Wednesday, Edwards said the lodge members are unhappy with the city's decision.
"We knew nothing about the excise tax," he said. "We thought that it was a state (tax) and we knew we were paying it. And then, all of a sudden, we find out ... that no, this is Porterdale's (tax), and the state has nothing to do with it."
According to the state Department of Revenue, an excise tax of 3 percent on mixed drinks may be charged by a local jurisdiction; the state excise tax on distilled spirits is paid at the wholesale level.
Edwards also said he is upset with the manner in which the discussion was handled Tuesday night.
"It was all cut and dried and everything was over with," Edwards said of the requests for a penalty waiver and a reduction in the pouring license fee.
"The main thing was how short, how we were cut off and didn't have a chance for any type of discussion," he said.
Edwards noted that the lodge has worked to support philanthropic efforts in the city.
"The Elks have given to (Councilwoman) Ms. (Linda) Finger's CARE program, and we've also given to the city money for donations for the fireworks," Edwards said. "That's what we couldn't understand."
Edwards said the back excise taxes and penalties won't be a financial blow for the Elks Club Lodge.
"We can pay the money," he said. "We just felt like we needed to be treated fairly, and we weren't."
The Elks Club Lodge is not the only establishment in Porterdale that is in arrears on its excise tax payments. According to the city, Porterdale Bar and Grill has not made an excise payment since new owners took over in December. In addition, Jimbo's Grill at the Mill has not paid its excise tax since receiving its pouring license in July. The Oaks golf course is current on all payments, according to the city.
City Manager Bob Thomson said businesses that owe delinquent excise taxes and penalties have been notified and the city is working to collect the revenue.