After Being Served, Roanoke Restaurants Settle Tax Bills

Recent crackdowns on Roanoke restaurateurs have resulted in an influx of owed taxes to the city, plea deals and dropped criminal charges.

Since October, city officials have recovered about $150,000 in delinquent meals taxes, with another $63,000 anticipated through payment plans, according to City Treasurer Tasha Burkett. Those figures cut across 22 different businesses. 

Burkett said the city is also seeing compliance from additional businesses after media coverage of business owners facing criminal prosecution. 

“We're not trying to be the hammer or anything like that,” she said. “We want people to be coming to us, working with us.”

Businesses that sell food in Roanoke collect a 5.5 percent tax, which they’re supposed to send to the city each month. As of December, 544 businesses are responsible for collecting such a “Prepared Food & Beverage Tax.” That makes up about $22 million of the city’s budget, roughly $1 in every $17 raised for municipal services.

About 30 businesses remain delinquent, Burkett said.

Commissioner of the Revenue Ryan LaFountain said a new tax system that went live in 2023 is allowing the city to better track which restaurants, cafes and food trucks aren’t paying their taxes. 

“We're trying to act from a place of good faith,” LaFountain said, recalling that he and staff members visited one business in person to try to compel payment. “The proprietor of the establishment refused to talk with us. He kicked us out, and we came in good faith, after multiple times trying to communicate with them, kicked us out and … that person's lawyer never actually got in contact with us.”  

In recent months, LaFountain and Burkett’s offices have referred 22 cases to prosecutors.

Prosecutor Joshua Dietz described meals tax embezzlement charges as a “last resort” only after tax officials have made every effort to work with the business that owes money.

“Because of our efforts recently, a lot of delinquent tax money has come in and restaurants have also been more diligent in reporting and paying what they owe on time,” Dietz said in an email. 

Multiple individuals have paid up after authorities filed criminal charges.

Prosecutors had charged former Local Roots restaurant owner Abraham Austin Eichelberger with not paying taxes and felony embezzlement. Court records show a jury trial scheduled for last month was canceled and replaced with a guilty plea scheduled for April.

Joel Miller, Eichelberger’s attorney, said in an email that his client would face a misdemeanor charge.  

A restitution order says Eichelberger and the commonwealth’s attorney “agree that $23,161.96 is owed in restitution.”

Jonathan William Kelly of Salem, operator of the Saltys Lobster & Co. food truck, told Roanoke Circuit Court Judge Christopher Clemens Monday he’s all paid up in terms of the funds he was accused in November of embezzling. Commonwealth’s Attorney Don Caldwell said he intends to discontinue Kelly’s felony prosecution after he confirms payment was made. A higher goal than convicting people is to gain compliance with the law, Caldwell said.

The judge also paused the misdemeanor prosecution of Shana Mitchell of Salem, operator of the Paper Dragon food truck, for two months upon learning that she needs more time to clarify what’s owed. “Not trying to evade anything,” she said outside court.

Authorities have previously dropped charges against a number of restaurant or food-truck operators who had been accused of meals tax violations but paid their outstanding balances, including Jonathan Clayton Booker, operator of the food truck Food on the Go; and Shaneice Lashae Jones, proprietor of Sweets by Shaneice. One meals-tax case against restaurant operator Jonathan Eric Shannon of Roanoke was dropped, while one remained pending Monday.

Meanwhile, online court records showed that Kat Pascal of Roanoke is scheduled to appear in Roanoke County Circuit Court Feb. 10 to enter a guilty plea to charges arising from her operation of the FarmBurguesa restaurant in Vinton. She declined to comment, as did her attorney.

A Vinton police detective wrote on Oct. 15 that Pascal owed $6,733 in back taxes. Tuesday, Vinton Treasurer Andrew Keen said by email that “taxes are still owed to the town.” He declined to elaborate.