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Stop the Meals Tax
Background
Massachusetts does not currently have a meals tax. Tangible property, services, meals, and motor vehicles are all subject to the same 5% state sales tax. Governor Patrick wants to raise the
Massachusetts sales tax on restaurant meals to 6%. In addition, he has proposed a law that will give cities and towns the authority to impose another 1% “local option meals tax.” If combined, these increases would raise the sales tax on meals by 40%.
Position: The Massachusetts Restaurant Association opposes any effort to raise taxes on restaurant meals.
· Once we allow our industry to be targeted for a tax increase, there is no telling where it will stop. It may begin with 1 or 2%, but it paves the way for a downward spiral of further hikes in years to come.
· Like most businesses, restaurants are reeling from the economic crisis. They are particularly vulnerable to these conditions given their small profit margins and unusually high operating expenses. They employ approximately 9.5% of the Massachusetts workforce; now is not the time to put more jobs in jeopardy.
· Currently in MA we have no such thing as a “meals tax”. All meals eaten away from home are subject to the state sales tax. It is blatantly unfair to tax food at a higher rate than ipods or flat-panel televisions.
· This is a regressive tax that will be felt most by our poorest residents. The average American spends 47.9% of their food budget at restaurants, according to the National Restaurant Association. Dining out is no longer just a luxury for the wealthy; it is a lifestyle necessity.
· The existing sales tax on meals provided over $644 million to the General Fund last year. Restaurants are also the cornerstones of every community. They revitalize neighborhoods and transform them into destinations.
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