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D.C. Council to Move on Bill That Would Make Food Trucks Charge Sales Tax
February 27, 2012
D.C. Council to Move on Bill That Would Make Food Trucks Charge Sales Tax
February 28, 2012
On the same day this week that a 30-day comment period for new rules on the city's food trucks closes, a D.C. Council committee will mark-up legislation that would force the city's increasingly popular four-wheeled vendors to charge sales taxes.
This Thursday the Committee on Finance and Revenue will move on the Vendor Sales Tax Collection and Remittance Act of 2011, a bill introduced last yearby Councilmember Jack Evans (D-Ward 2) that would force food trucks to charge the same 10 percent sales taxes paid by brick-and-mortar restaurants. Currently, the food truck vendors pay a flat $1,500 annual fee ($375 per quarter), a fact that has frustrated many a restaurant owner who say that they're facing mobile competitors on an unfair playing field.
At the time of the bill's introduction last March, food truck operators expressed their opposition to the movewithout a parallel attempt to re-write the District's age-old vending laws. That re-write is currently taking place, though, and wraps up on Thursday, when a second comment period on proposed rules closes. Food truck operators have largely supported the proposed rules, while brick-and-mortar restaurants have opposed them to varying degrees.
Che Ruddell-Tabisola, who heads up the D.C. Food Truck Association and owns the BBQ Bus,said today that the organization's concerns were no longer about payingsales taxes, but rather how and when they would be collected. Currently, the actual food trucks and vendors within them are licensed separately, and Ruddell-Tabisola said it wasn't clear which would be responsible for the taxes. For the sake of clarity and consistency, he added, Evans' tax bill and the new food truck rules would have to be passed in tandem.
"We will start collecting sales taxes if [the city] starts treating us like businesses," said Ruddell-Tabisola, who complained that food trucks have to deal with police harassment and vague city regulations that normal restaurants don't face.
The bill has changed since it was first introduced last year. Under aversion that will be circulated tomorrow and marked up on Thursday, food trucks that collect more than $375 in sales taxes on a quarterly basis will continue paying the taxes; trucks that collect less than thatwill pay the vending fees they pay currently instead. If passed, the legislation would kick in this October.
Beyond bringing parity to the lunchtime playing field, Evans and others have said that the tax would bring in much-needed revenue to the city. Last year, the non-partisan Tax Foundation called ita "good, base-broadening move, and, as a method of raising revenue, is preferable to raising the sales tax rate an equivalent amount."
Representatives from the Restaurant Association Metropolitan Washington were not immediately available for comment.
UPDATE, 5 p.m.: Andrew Kline from RAMW told us that the group supports the bill. "People that sell food products in D.C. should collect sales taxes," he said.
Jurisdiction:
Washington DC
