Scrap the Massachusetts Meals Tax for Now [PHIL-OSOPHY]
The Commonwealth should live up to its name by sharing the struggles and putting the meals tax on ice until this pandemic improves. Beacon Hill can afford to do it financially and must act immediately to help rescue the restaurant and hospitality industries. Restaurants need as much support and aid as they can get by temporarily lifting the tax.
Massachusetts imposes a separate tax on prepared foods. The statewide meals tax is currently 6.25 percent, which is also the statewide sales tax rate. Some cities and towns can also choose to add an additional "local option" sales tax on meals sold in that locality. Drop them all until we can start rebounding from this plague.
Right now, businesses can defer payments of regular sales, meals and occupancy tax collections owed between March 2020 and April 2021. That means all the taxes are due in May 2021, but with what money? Businesses that collected less than $150,000 in meals, sales and room occupancy taxes are eligible for tax relief as well. There are no penalties or interest collected during this tax extension. This is beneficial; however, desperate times call for extra desperate measures. Strangely, Hippocrates originated the phrase, saying for extreme diseases, extreme measures of cures is suitable. Well, that aphorism applies perfectly here, because the financial distress has been caused by a killer disease.
In New Bedford, the city council voted in favor of having the Mitchell Administration agree to reduce the renewal fees for all on-site alcohol licenses by 25 percent for 2021. That deserves applause. But all things considered, restaurants need more help right now and eighty-sixing the meals tax – not just deferring it – is another way to help stop the cookies from crumbling.
Phil Paleologos is the host of The Phil Paleologos Show on 1420 WBSM New Bedford. He can be heard weekdays from 6 a.m. to 10 a.m. Contact him at firstname.lastname@example.org and follow him on Twitter @PhilPaleologos. The opinions expressed in this commentary are solely those of the author.