By Jim Tuttle
Smithfield Times Staff writer
Until they are satisfied that Isle of Wight’s newly contracted tax collection agency is operating legally, Smithfield officials will not piggy-back on the county’s contract.
“It appears to me … that he’s collected fees that are far in excess of what he is permitted to collect,” Town Attorney Bill Riddick said during a recent council meeting.
“Until this gets resolved, I would not recommend that the town enter into any agreement” with the company, he added.
Since mid February, Virginia Auction, Recovery and Seizure Company has been using license plate readers to identify vehicles belonging to Isle of Wight personal property tax delinquents. Once found, the cars are impounded and not released until the back taxes and recovery fees are paid.
Smithfield has been given an opportunity to piggy-back on the contract.
“We would authorize [Virginia Auction] to collect on our behalf when action was taken because of the county’s contract,” said Smithfield Treasurer Ellen Minga.
With Riddick on vacation for the week, the issue will not likely come up until a Town Council Committee meeting at the end of the month, she added.
The company charges a $350 “recovery fee” in addition to 20 percent of the amount owed to the treasurer’s office. If the vehicle remains impounded for more than a week, a $30-per-day storage fee is levied as well.
Prior to Feb 26, the company was charging a $225 towing fee, a $125 spotter fee and a $45 inventory fee, plus 20 percent of the back taxes that were owed, According to Isle of Wight Treasurer Judy Well. The storage fee conditions were the same.
The change came after Riddick spoke with Wells, citing a section of Virginia Code that states, “The … collection agency’s fees shall not exceed 20 percent of the taxes or other charges so collected.”
According to Attorney Kevin Appel, an expert on Virginia tax collection law, the new fee structure is legal, because the company pays another company to tow vehicles.
“I don’t think you can charge additional fees, but if you have a separate towing company, that’s allowed,” he said.
Riddick said he also questions the company’s policy of immediately towing vehicles instead of simply removing the tags or employing a wheel lock device.
The county elected not to distress the vehicles by removing the tags because of a potential liability problem, Wells said. If something happens to a distressed vehicle, her office could be held responsible.
The use of a “boot” or wheel lock was also deemed impractical.
“Sometimes they will try to cut them off or do other things that they shouldn’t be dong,” Wells said.
“That’s the reason we decided not to do that at all; we decided to just do the towing.”
