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Meal Tax Passes – effective July 1st

From CBS 6: Photo by Laura French RICHMOND, Va. — Richmond City Council voted Monday night to raise the city meal tax in order to fund the renovation and replacement of the city’s crumbling school facilities. The proposal, introduced by Mayor Levar Stoney, will bump the meals tax at Richmond restaurants from 6 to 7.5-percent, effective July 1, 2018. The total tax, combined with sales tax, would go from 11.3 to 12.8-percent. It would be the difference of tax bringing a $60 check to $67.68 versus $66.78 – or 90 cents difference. The proposal passed with a 7-2 vote. Councilwomen Kim Gray and Kristen Larson voted “no.” Larson had previously said that she wanted to defer voting for at least two weeks. During that time, she wanted council to consider adding a sunset clause. That would allow the increase to expire after five years. After the increase was approved Monday night, Mayor Stoney released a statement that read:
“Tonight, the City of Richmond sent a strong message to its students that it is no longer willing to kick the can down the road when it comes to providing them with modern, safe and healthy environments in which to learn. This is just the first big step in what will be many more steps to improve our schools for our children, and for the generations of Richmond Public School students to come. After decades of telling them to wait, tonight we put them first. We are moving full-steam ahead with our plan to generate $150 million in new school construction and renovation of facilities that have been neglected for far too long. This was not an easy decision, and it does not solve all of our schools’ challenges, but it was important that we get started now. I’d like to thank the members of City Council tonight for understanding the urgency and importance of our needs and having the courage to take action. And I would like to thank the Richmond School Board and Superintendent Jason Kamras for their advocacy and leadership for the children under their care. Through our Education Compact, we will continue to work together to tackle the challenges that lie ahead and forge solutions that will not only benefit our students but also make our city stronger. To the restauranteurs who supported this proposal and those who had reservations about it, you are part of what makes Richmond a great place to live, work and play. I will continue to be a champion for you, and I look forward to finding ways that we can make it easier for you to do business and continue to thrive. The large number and wide range of individuals and organizations who have supported this initiative – from education advocates to the real estate and business community to RPS teachers, parents and students – reinforce the broad consensus that we must move forward. Our kids can’t wait, and you heard their voices. Our children face a brighter future. Now let’s make it happen.”

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11 comments

Liz 02/13/2018 at 6:49 AM

There were people on both sides on this issue and I was one who could see both sides but now that it’s done, I suggest we all plan to patronize one of our wonderful restaurants on July 1 to show our support! I want our restaurant business to continue to thrive and they should not be made to suffer because of this decision.

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bill 02/13/2018 at 11:00 AM

As seen on TV. Congratulations to Stony, Newbil etc. proving they are the smartest politicians in the room by portraying supporters of the referendum to fix schools as racists and child abusers in order to pass a new regressive food tax.

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Jake 02/13/2018 at 11:25 AM

What message did Mayor Stony send to restaurant owners and working class wait staff by increasing the cost of their meals w/o any benefit to them? 12.8% tax on a meal is obscene, and this is guaranteed to hurt the small businesses in our city. You know what would be a stronger message to students? Finding $9 million in wasted money from the budget, and allocating that to schools without raising taxes a dime.

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crd 02/13/2018 at 12:28 PM

@2 thanks, and I agree with you that it’s regressive but Stoney was quoted in Style as saying it’s not regressive because poor people can choose not to eat out. I am so ticked off about this that I’m ready to work for whoever is running for mayor when Stoney’s term runs out.

@3 yes I agree it’s obscene. It’s nearly fifteen percent, add another fifteen percent for tip (minimum) and you’ve increased your bill by thirty percent. Ridiculous.

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Elaine Odell 02/13/2018 at 1:55 PM

Note that RVA does not tax tobacco, but choses to tax food, instead. A poor choice.

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lanny 02/13/2018 at 2:59 PM

#2 – Bullying is endemic in our society right now; and it’s important to keep in mind that people who mock or disparagingly label other people because they, or their ideas, are different are bullies…plain and simple and regardless of the venue, including Richmond’s city hall.

Acknowledging that fact, recognizing that your mayor or your council person or your neighbor or your co-worker is a bully might not make the bullying easier to bear; but it’s important to acknowledge.

Lead by the mayor, those who called for this recent tax increase repeatedly claimed that the city’s children, the city’s students, are the city’s most important asset. That’s an emotional statement but neither rational or true.

I used to be a child and a student; and outside of my family unit I wasn’t an important asset. Aside from my family I wasn’t an asset at all, until I outgrew childhood.

But claiming that the city’s least productive group is its most important group lumps everybody else into the category of “lesser.”

Interesting message from your “leaders,” huh? Particularly when they bully you for complaining about being lesser.

The mayor and the new superintendent thanked city council last night for burdening city businesses and taxpayers. I attended a meeting last year held by Newbille and someone asked her why nobody in the city administration ever thanked the taxpayers. She said the concept had never occurred to her but that maybe taxpayers were due thanks.

By all that’s rational, if there is a group in Richmond that truly is the city’s most important asset, it’s the taxpayer.

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ray 02/13/2018 at 3:21 PM

We all know why they are scared to tax tobacco.

Altria/Phillip Morris will pitch a fit. Their HQ, manufacturing facility, and research center are all here, they pay a lot of taxes, and employ a lot of local people. Fact is, money talks.

The restaurant people just don’t have their shit together They’re not organized and they get beat with increased meals taxes time and time again. When will they ever learn?

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The U.....nion Hill 02/13/2018 at 4:44 PM

Again, Stoney is career politician that has never held a real job that entitles budgeting or actual fiscal prudence.

I would like to see restaurants that were targets of his rhetoric refuse him service.

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SA Chaplin 02/13/2018 at 7:56 PM

Here’s a little thing that Richmond restaurants can do (based on Section 58.1-3840 of the Code of Virginia): Pre-print on every tab:

The following are our mandatory gratuities. Please choose:

__We will add a gratuity of 20% for our waitstaff. Therefore, 20% of you bill will not be subject to the City of Richmond meals tax.

__We will add a gratuity of 18% for our waitstaff. Therefore, 18% of you bill will not be subject to the City of Richmond meals tax.

__We will add a gratuity of 15% for our waitstaff. Therefore, 15% of you bill will not be subject to the City of Richmond meals tax.

__We will add a gratuity of 10% for our waitstaff. Therefore, 10% of you bill will not be subject to the City of Richmond meals tax.

An example: If your tab is $48.00 and you check #3 (15% tip) your bill (before tip!) will be $53.60 [$48.00 + $3.06 (7.5% x $40.80) + $2.54 (5.3% x $48.00)] instead of $54.14.
Your 15% gratuity will be $7.20 (15% x $48).

Here’s the pertinent part of the statute:

§ 58.1-3840. Certain excise taxes permitted.
A. The provisions of Chapter 6 (§ 58.1-600 et seq.) to the contrary notwithstanding, any city or town having general taxing powers established by charter pursuant to or consistent with the provisions of § 15.2-1104 may impose excise taxes on cigarettes, admissions, transient room rentals, meals, and travel campgrounds. No such taxes on meals may be imposed on (i) that portion of the amount paid by the purchaser as a discretionary gratuity in addition to the sales price of the meal; (ii) that portion of the amount paid by the purchaser as a mandatory gratuity or service charge added by the restaurant in addition to the sales price of the meal, but only to the extent that such mandatory gratuity or service charge does not exceed 20 percent of the sales price;

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Sarah 02/13/2018 at 8:33 PM

@4 – Sorry to disagree with how your comment was stated, but without the context of other taxes levied and the current resulting tax burden, the comment comes across as misleading. This isn’t a great medium for formatting, but as an example, take a $20 dinner:

Prior to July 1 After July 1
Initial Bill $20.00 $20.00
State Sales Tax 0.043 0.043
Local Sales Tax 0.01 0.01
Richmond Meals
Tax 0.06 0.075
Total Tax (%) 0.113 0.128
Tax ($),
Factored by
Initial Bill $2.26 $2.56
Additional Tax $- $0.30
Initial Bill
+ Taxes $22.26 $22.56
Tip (15%) $3.34 $3.38
Total Bill
(Taxes + Tip) $25.60 $25.94
Total Additional
Cost $- $0.35

Combined taxes (state, local, and meals) already meant an effective 28% premium on meals, pre-July 1.

Total Burden,
Tax+Tip $5.60 $5.94
Initial Bill $20.00 $20.00
Tax+Tip Premium
on Initial Bill 28% 30%

I think there’s room to argue that the existing 6% meals tax (and current 28% combined, effective premium) was already high. I think there’s room to argue that some monies could be found in greater school system efficiencies, rather than new taxes. And I’m sympathetic to the argument that, once in place, taxes tend to outlive the purpose they were created to serve. But then I hope all commentators were concerned about those issues prior to the discussion of an increase in any taxes, and the meal tax in particular.

(For those of you interested in a higher ticket dinner, the tax+tip costs on a $100 dinner increase by $1.72 after July 1.)

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TigerLilly 02/13/2018 at 10:27 PM

Death&Taxes

Reply

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