MEMPHIS Tenn. Restaurateurs here are protesting a move by the Shelby County Commission to levy a 2-percent tax on prepared foods and beverages.
The county commission on Monday approved the tax, which is intended to help offset a $14 million deficit in the county budget. The measure must be approved by the Tennessee state legislature before becoming law.
David Boyd, president of the Memphis Restaurant Association and owner of D'bo's Buffalo Wings n' Things, told Nation's Restaurant News that the tax would put an unfair burden on the restaurant industry. He explained that that the new tax would effectively bring Memphis restaurateurs’ tax rates up to 11.25 percent.
“We already pay 9.25 percent," Boyd said. "Our organization is obviously adamantly opposed to the unfair tax on our industry."
Boyd pointed to other issues already impacting restaurants, such as the struggling economy, rising food costs, a statewide smoke ban that went into effect last year, a minimum wage increase and the cost of upgrading systems for secure credit card processing.
“We are already having a difficult time. The industry is feeling the recession we are in — and we are in one. Last year was the worst the industry has seen in years,” Boyd said. “Last thing we need is another tax.”
In order for the Shelby County resolution to make it through the legislature, a state senator must sponsor it. According to published reports, hospitality leaders are writing to senators and asking them to block the tax.
“Things are already so expensive here," Boyd of the MRA said. "We have higher taxes on liquor than anybody. At 25 percent, a glass of wine in this city will cost you as much of a bottle elsewhere. At some point it makes more sense to go to Kroger and pick up groceries than to dine out."
In addition to Memphis, Shelby County includes the cities of Arlington, Bartlett, Collierville, Germantown, Lakeland and Millington.
