, Newburyport, MA

March 8, 2013

Amesbury weighing meals tax

Proposal would add 0.75 percent to restaurant tabs

By Mac Cerullo
Staff Writer

---- — AMESBURY — Local restaurant patrons may be forced to dig a little deeper into their pockets if the City Council follows the lead of neighboring communities and enacts a proposed local meals tax.

District 2 Councilor Christian Scorzoni has introduced a bill that would impose a 0.75 percent local tax on the price of all meals on top of the state’s 6.25 percent sales tax.

The local tax, which would add 38 cents to a $50 restaurant tab, could generate an estimated $200,000 in additional revenue annually for the city.

That money could then be used for a specific purpose without further burdening property owners in Amesbury, Scorzoni said.

“The No. 1 issue I hear in my neighborhood is the sidewalks in the area,” Scorzoni said. “This could be a targeted approach for how money is used to put toward improving neighborhoods in Amesbury.”

Many surrounding communities already have a local meals tax, including Newburyport and Haverhill, which each approved adding their own 0.75 percent local meals tax in 2010.

The combined tax would still be lower than New Hampshire’s state meal and rental tax of 9 percent, keeping Amesbury at a competitive advantage over border communities like Seabrook.

Scorzoni also said a local meals tax would help Amesbury generate a new revenue stream without targeting homeowners who already pay one of the highest property tax rates in the area.

“(Newburyport) is raising revenue through both the public parking and through the meals tax, and we don’t have either,” Scorzoni said. “So at a certain point, we’re basically leaving money on the table.”

Scorzoni also said the local meals tax would ultimately bring in money from non-residents who dine in Amesbury and is something local residents could avoid if they chose.

“If you don’t like the tax, you don’t have to go out and pay it,” Scorzoni said. “You’re targeting discretionary spending, which is a much better option than using free cash and the property tax rate.”

It’s unclear what impact the potential new tax would have on local restaurants, which would be forced to charge their customers the additional fee.

Mayor Thatcher Kezer agreed with Scorzoni that if the tax were implemented, it should be dedicated to a specific purpose. He added that Scorzoni’s idea to put the new revenue through a local meals tax toward road and sidewalk repair was a good one and would definitely be considered.

Over the past few years, Kezer has dedicated $200,000 in free cash, or unspent tax dollars, to repair roads and sidewalks around the city. Scorzoni said the amount of revenue from a meals tax would be close to that amount, making it an ideal alternative over continued use of free cash.

Scorzoni said his revenue projections came from the state Department of Revenue, which tracks meals tax figures from around the state and provides data to local communities. According to the Department of Revenue, almost half of the 34 communities in Essex County currently have a local meals tax, including every city but Amesbury and Lynn. All those communities with local meals tax options have enacted rates of 0.75 percent.