ROANOKE, Va. – A new meals tax hike is leaving a bad taste in the mouths of Roanoke restaurant owners. This week, the City Council approved an increase in the meals tax from 5.5% to 6.5%. Now, some local business owners say the city is taking too big of a bite out of their profits.
If you grab a bite to eat or drink in Roanoke, the bill may look a little different. The City Council raised the meals tax to 6.5%, and local businesses express that disappointment is an understatement.
Keriann Campbell, general manager of Our Daily Bread, stated, “I think all of the local restaurants wanted to be heard and seen a little more, but at the end of the day, we have to accept the decision, but no one will forget.”
Jason Martin, who owns three restaurants in downtown Roanoke, expressed his concerns in a public letter to the City Council. He noted that the city now earns more per dollar of food and drink sold than restaurants do in profit. He described the move as feeling like a slap in the face.
“You know, last week was Small Business Appreciation Week, and it’s so ironic they voted to raise this tax on a specific small business. This whole thing feels like they don’t really support us; it feels like they are just riding our backs, and now they are making more money than we are,” Martin said.
Martin added that customers will notice the tax increase on their bills. “Yeah, you’ll see it on the bill; it will be the line item there at the bottom. It will be your subtotal and then tax, state, and local, at 11.8%,” he said. “But it leaves a sour taste in your mouth as you walk out the door.”
The City Council stated they will work with city staff to further research the claims of the city making more off restaurant sales. The revenue from this tax increase will help fund overtime pay for employees and address a maintenance backlog.
Mayor Joe Cobb provided a statement about how the city is trying to help local restaurants, saying, “Council voted to adopt a 1% increase (less than the proposed 1.5%), added a 1.5% credit for early and/or on-time tax payment, and added a sunset clause of two years.”
Both Martin and employees at Our Daily Bread hope that the increase does not push people away from supporting local restaurants. The meals tax increase goes into effect July 1, with the council reevaluating each year to see if it is still necessary.