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 excluded 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 Massachusetts, we have no such thing as a “meals tax”. All meals eaten away from home are subject to the state sales tax, and the restaurant industry strongly opposes any legislation that would single-out one industry for an additional tax.
- 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.
- Do not jeopardize this important economic engine. The existing sales tax on meals provided over $644 million to the General Fund last year. A tax increase could drive away sales and reduce an important revenue source for the Commonwealth. It would be harmful to the industry to have a checkerboard of different tax rates among cities in towns.
Background
Currently, the laws in Massachusetts governing caterers and the service of alcohol are outdated and very confusing to both operators and local regulatory authorities. This law will primarily allow caterers to purchase alcohol at package stores, to store it and transfer it, and to charge the private party hiring the caterer for its service.
This confusion has led to increasing situations where many caterers are being requested to do things that remain illegal but are accepted as common practice. Those who know the law and abide by it are at competitive disadvantages to those who are ignorant of the law and accommodate their customers’ requests.
The licensing of caterers would allow them to accommodate their customers’ needs while ensuring the proper service of alcohol by licensing that requires service training and liquor liability insurance.
Smaller caterers who would not be interested in purchasing such a license would still be able to operate under existing laws.
Position:
The MRA supports HB 295 (Rep. Michael Rodrigues, D-Westport), which authorizes the Alcoholic Beverages Control Commission to establish a new class of liquor license to an operator of a catering business.
- This license will allow caterers to purchase from package stores, transport, store, and deliver alcoholic beverages to their customers to be used at private functions that are not open to the public in towns that allow alcohol to be served.
- This will promote better public safety by putting restrictions and parameters on activities that are currently unregulated.
- Licensees will be limited to serving open bars for a maximum of 5 hours.
- Licensees must have liquor liability insurance for a minimum of $100,000 to any one person and $200,000 to all persons.
- All employees of a licensed caterer must be certified by an alcohol server training program.
- Licensees would be subjected to the same laws regarding the serving of minors and service to intoxicated patrons.
- Alcohol must be purchased from a package store and be stocked on a premises owned by the licensee.
