Massachusetts Restaurants Consider Tax Holiday

Some area restaurant owners say legislation supported by 20 state senators and representatives that would eliminate the state’s 6.25 percent meals tax on food and alcohol for a week in March would give local restaurants much-needed attention, reports the Worcester Telegram.

Multiple snowstorms have kept people stuck inside, and the proposed meals tax holiday March 20 through March 26 would bring consumers back out to eat, one restaurant owner said. The tax holiday would not apply to the .75 percent meals tax that towns and cities are permitted to charge.

Paul Barber, owner of the Flying Rhino Café & Watering Hole on Shrewsbury Street in Worcester, said the holiday “would definitely help shake the poor habits … the routine of not going out.” He said it would bring “awareness to part of the economy that has been struggling through the winter.”

But such a holiday would cost state meals tax collections an estimated $11 million to $15 million, according to Robert Bliss, spokesman for the Massachusetts Department of Revenue. A year ago, meals tax collections for March totaled $63 million, or about $16 million per week.

Restaurateur Mike Covino of Niche Hospitality Group in Worcester thinks the tax holiday would encourage customers to feel good about spending and supporting the local economy. Were the bill passed, Mr. Covino said he would make additional price adjustments to encourage customers to come in.

“I think it would be a good idea to try to get people out spending, especially when they’ve been cooped up in the house from the snowstorms,” said Joe P. Gerardi owner of Big Joe’s Deli on Shrewsbury Street in Worcester. “Maybe this will get them out and generate some revenue in the city and in the state.”

Not all restaurant owners favor a tax holiday. Robert J. Dagnello, owner of Wonder Bar Restaurant on Shrewsbury Street, felt that it would not benefit small restaurants. “It’s going to create more paperwork than it’s worth,” he said. “If they really wanted to help the small businesses, they would do six months, not one week.”

But Madeleine Ahlquist, owner of VIA Italian Table on Shrewsbury Street, part of the three-venue Worcester Restaurant Group, said, “I think a week is very generous.” According to Ms. Ahlquist, the tax holiday would most likely not bring new customers to her restaurant, but might encourage regular customers to come that week.

“We’ve got to continue moving forward and try to find ways to continue our efforts in support of business,” said State Sen. Michael O. Moore, D-Millbury, who is among the co-sponsors of the legislation. “I would love to see the restaurant industry come out of this week with record profits, people going to restaurants, filling tables, so that restaurants can establish new business which will hopefully result in returning customers,” he said.

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