ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, December 18, 1996 TAG: 9612180065
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: CHRISTINA NUCKOLS STAFF WRITER
Cox Communications has settled its tax dispute with Roanoke County.
The cable company will turn over more than $50,000 in back payments, County Attorney Paul Mahoney told the Board of Supervisors Tuesday. But more important to county officials is Cox's consent to be placed on the regular tax rolls beginning next month.
Mahoney said the settlement specifies that Cox will not pass the taxes on to its customers through a rate increase. The company recently announced it would increase its rates up to 7.6 percent. Cox officials, who could not be reached for comment Tuesday evening, said earlier that the increased rates were caused by channel additions, increased programming costs, inflation and higher operating costs.
Cox has not paid gross receipts taxes - also known as the Business, Professional and Occupational License tax - since it moved to its new county offices in August 1994. The $50,000 in back payments covers a year and a half, or more than half of the amount the county says it is owed.
Beginning Jan.1, Cox will pay 20 cents per $100 of gross receipts annually. That's the rate imposed on retail businesses.
Twenty-three counties, 46 towns and 15 cities in Virginia - or about 40 percent of the state's localities - impose a tax on cable providers.
Many Virginia localities treat cable companies as a business service, which is charged at a rate of 36 cents per $100. Others put the cable companies in a special category and set their own rates.
Cox settled a similar dispute with Roanoke city in July. Under that agreement, the cable company paid $125,000 or roughly half what the city said it was owed.
Cox jointly negotiates franchise agreements with the county, the city and the town of Vinton. Under the agreement that ended in 1991, Cox was allowed to pay franchise fees in lieu of BPOL. The franchise agreement that took effect in May 1991 and continues today does not exempt Cox from BPOL.
Also Tuesday, county supervisors voted to extend negotiations for three months in another major tax dispute.
Kroger company is questioning whether it must pay BPOL taxes for its warehouse and distribution center on West Main Street. Mahoney said the amount in dispute is roughly $200,000 a year. Lawsuits on back taxes are limited to a three-year period, so Kroger stood to lose $200,000 for 1993 if it did not sue by the end of the month. The supervisors' vote allows the company to retain its claim on that amount if negotiations fail to settle the issue.
Mahoney said Kroger pays a lump sum in gross receipts taxes to cover all of its retail stores and the warehouse. The company raised the issue this year over whether the warehouse fell into one of several exemptions allowed by law for wholesale businesses.
In other business:
* Supervisors rescinded a vote they took last month to begin condemnation of a one-acre tract needed for widening Country Farm Road, west of Salem. Mahoney said officials with the Virginia Department of Transportation now say the action is not necessary at this time. However, VDOT said the project could be resurrected in the future.
* The board also refused to support a request by the Hollins Research Institute for tax-exempt status. Assistant director Catherine Wolhberg said she is uncertain whether the action will prevent the institute from moving to a new building on Walrond Drive. The institute specializes in research and treatment of stuttering.
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