Food trucks operating in the District would be required to collect and pay the standard 10 percent D.C. sales tax levied on restaurants and prepared food sellers if a bill to be considered this week eventually becomes law.
D.C. Council member Jack Evans plans to move legislation originally introduced a year ago for legislative mark-up at a scheduled March 1 meeting of the Committee on Finance and Revenue he chairs. If the proposed tax regulation — the “Vendor Sales Tax Collection and Remittance Act of 2012” — is voted out of committee and subsequently approved by the full Council it will be sent to Mayor Vincent Gray for his signature.
As detailed in this column last month, food trucks currently pay only a modest flat fee of $1,500 per year in lieu of sales tax — a token alternative annual payment initiated several decades ago, when ice cream trucks and hot dog carts with nominal revenue and unrecorded cash transactions ruled the roads.
With food trucks now charging brick-and-mortar eatery prices or higher, and commonly utilizing mobile devices to record sales and accept credit card payments, the Council may soon put an end to one of the city’s only grey economies in the food service and hospitality industry.
Food truck customers assume that these mobile vending businesses already contribute their fair share by collecting and paying the same local sales tax as other food service purveyors. Many of the filed public comments submitted by truck patrons regarding new regulations governing food truck operation proposed by the D.C. Department of Consumer and Regulatory Affairs (DCRA) make the claim that the city benefits from their payment of sales taxes.
Tax issues, however, are not included in the DCRA proposed rulemaking that will later be reviewed by the D.C. Council for approval or rejection. D.C. sales tax regulations and rates are set by D.C. Council legislation and collection is the domain of the D.C Office of Tax and Revenue (OTR). Council member Evans is the longstanding chair of the committee handling local taxation and city revenue matters and since 1991 has represented the Ward 2 downtown Washington central business district, extending from Georgetown to the U.S. Capitol, where food trucks primarily ply their trade.
Whether local food trucks will support sales tax parity, playing by the same rules and offering to become full-fledged and responsible members of the city’s small business community, will soon be known. An announcement by either the D.C. Food Truck Association (DCFTA) or the group’s lobbyist from the Washington public advocacy office of the international law firm Squire, Sanders & Dempsey is anticipated as the D.C. Council considers this tax discrepancy.
Food truck operators have previously insisted that being treated equally on taxes should occur only in exchange for other exceptions sought by DCFTA to the DCRA regulations. While food trucks may want to “trade” tax compliance, there is scant evidence of public support for continuing to exempt their businesses from the standard sales tax levy or allowing them to hold the issue hostage in order to extract special rules on other unrelated operating regulations.
Fairness for all businesses should begin with food trucks paying the same sales tax rate as the rest of their hospitality and food service colleagues. The D.C. Council should act to establish a level playing field by approving this legislation.
D.C. Chamber small business awards
The D.C. Chamber of Commerce is accepting nominations through March 30 for its 2012 Champions Awards celebrating local small businesses and the people that support them, in multiple award categories. D.C. Chamber President and CEO Barbara Lang notes that “the small businesses of D.C. are leading our city’s economic recovery and propelling our city’s growth,” making it a priority for the organization “to recognize outstanding leadership and success in the small business sector.”
Information on award nominations and the Small Business Expo on May 16 featuring announcement of the honorees, sponsored by LGBT business community supporter Eagle Bank, are available online at www.chamberschampions.org.
CAGLCC networking event
The Capital Area Gay and Lesbian Chamber of Commerce (CAGLCC) will host its 4th annual Mega Networking and Social Event on Wednesday, March 14, from 6:30 to 8:30 p.m. at Town Danceboutique. Attended by hundreds of local gay and lesbian professionals and business leaders, it is the group’s signature fun and fabulous yearly meet-and-greet opportunity.
Registration for the largest local LGBT business gathering of the year is free, open to members and non-members alike, and available online at www.meganetworkingdc.com.
Mark Lee is a local small business manager and long-time community business advocate. Reach him at OurBusinessMatters@gmail.com.