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Council moves to cap and permit waivers for B&O penalty accruals amid HDL enforcement rollout
Summary
Council directed staff to allow finance-committee waivers and adopted an interim cap that limits compounding B&O late penalties to $2.50 per reporting period with a $500-per-year cap while staff work to amend the ordinance and evaluate refunds/waiver impacts.
Charles Town — After discussing a vendor-provided enforcement list and multiple appeals from small vendors, the council on Aug. 5 approved an interim approach to business‑and‑occupation (B&O) late penalties and broadened the finance committee’s ability to waive fees pending an ordinance revision.
Finance staff presented a list produced by the city’s tax-recovery vendor that showed a handful of businesses accruing large penalties under the city’s existing penalty calculation (a $50 monthly penalty that compounds across missed reporting periods). Council members said the compounding led to extremely large sums for small businesses that had not filed returns in prior years.
The council approved an interim relief policy that: (1) authorizes the finance committee to consider and grant waivers without requiring a full refund application upfront, and (2) sets an operational cap on the monthly/periodic penalty so it accrues only $2.50 per reporting period up to a $500 annual cap instead of the current open-ended compounding method. The council asked staff to redraft the ordinance to reflect the change and return it for formal adoption.
Members described the decision as pragmatic: it reduces outsized penalties for small or inadvertent nonfilers while preserving the city’s ability to collect tax liabilities and interest. Council also discussed fairness to taxpayers who had already paid and directed staff to evaluate the cash-flow and refund implications before issuing any retroactive refunds.
The finance committee will continue to handle individual waiver requests and will bring any complex or high-dollar cases back to council for final direction. The city’s tax vendor (HDL) will continue collection work under the existing contract; the council asked staff to coordinate timing so that vendor remittances and any council-directed waivers/refunds are processed consistently.
