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Several towns consider adding a local meals tax

The tax would add .75% to a state meals tax of 6.25%.

Dina Rudick/Globe Staff/File

The tax would add .75% to a state meals tax of 6.25%.

WEYMOUTH — For several years, Mayor Sue Kay resisted asking the Town Council to approve a local meals tax, but the temptation of raising about half a million dollars a year has proved to be too enticing.

She has asked that Weymouth join the 163 other communities around the state that add a .75 percent tax to meals sold in local restaurants — money that goes directly to the cities and towns.

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Cohasset, Scituate, and Sharon also are considering the meals tax, at Town Meetings this spring, and Braintree may as well, local officials said.

“It’s less than a penny on the dollar,” Kay said recently. “If I can realize a revenue stream that would cause minimal harm to our residents and businesses, it would be foolhardy not to do it.”

The local meals tax first became an option in 2009 when the Legislature allowed communities to approve it as an addition to the 6.25 percent the state already tacks on restaurant bills. Kay held off for fear the small restaurants in Weymouth would be hurt.

Server Sue Henderson, cq, of Hamilton, prepares to serve a table at Hilltop Steak House.

Dina Rudick/Globe Staff

Server Sue Henderson, cq, of Hamilton, prepares to serve a table at Hilltop Steak House.

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“I initially thought why should we burden these restaurants with another cost?” she said.

But after seeing how many other communities, including adjacent Quincy and Hingham, successfully adopted the surcharge — and how much money they were hauling in — Kay decided to ask the Town Council to approve the measure for Weymouth.

South of Boston, municipalities that have adopted the meals tax include Abington, Bridgewater, Brockton, Canton, Dedham, Fall River, Foxborough, Hingham, Hull, Kingston, Middleborough, Milton, Norfolk, Norwell, Norwood, Plainville, Quincy, Randolph, Stoughton, Walpole, Wareham, and Whitman.

The decision has fed big bucks into local tax coffers. For example, Quincy collected just over $1 million in meal taxes in 2012, according to the state Department of Revenue. Hingham brought in almost $465,000 and Dedham about $613,000, the state reported.

The state estimates that Weymouth could collect about $525,000 annually — money that Kay would set aside to maintain and improve the town’s playing fields, which she said are in “terrible shape.”

“I’m sure the [restaurant owners] aren’t thrilled about it, about any type of increase in their costs,” Kay said. “But it’s pennies, absolute pennies. We don’t see Quincy people coming to Weymouth [to eat] because they have to pay pennies more there.”

Patrick O’Connor, vice president of the Weymouth Town Council, which needs to approve the plan, doesn’t buy the argument, though. He said people are “overburdened with taxes” and don’t need another, albeit a small one. On a $100 restaurant tab, for example, the tax would add 75 cents.

“The arguments that it’s only a few pennies aren’t strong enough,” O’Connor said. “Our local residents have to pay gasoline taxes, property taxes, excise taxes, sales taxes, and Governor Deval Patrick is proposing raising the state income tax and open road tolling. Then on top of that, there are fees for almost everything as well.”

The governor has proposed raising the state income tax from 5.25 percent to 6.25 percent, while cutting the sales tax from 6.25 percent to 4.5 percent and raising fares and tolls on the MBTA, the Massachusetts Turnpike, and other roads. The extra revenue would go, in part, toward investments in education and transportation. O’Connor decries the approach.

“I understand that this is a tool for municipalities,” he said of the local meals tax, “but if we just keep on allowing tax increases there will never be a discussion about the fraud, waste, and abuse in the state and federal government. . . . The money being wasted, abused, or taken fraudulently would do much more for municipalities than a tax on its residents who chose to go out to eat.”

Business owners, too, have largely said they don’t favor jacking up the tax on restaurant meals.

“We have opposed this in each town where it’s come up,” said Peter Forman, president of the South Shore Chamber of Commerce in Quincy. “Restaurants are very sensitive to costs, and operate off very thin margins in many cases. We just think this is an unnecessary added burden.”

Weymouth’s Town Council has yet to schedule its vote on the measure.

Braintree’s councilors, meanwhile, have rejected the idea twice — in 2010 and 2011 — but may take it up again this year. Kay said she believes her counterpart in Braintree, Mayor Joseph Sullivan, will propose the tax.

Sullivan’s chief of staff, Peter Morin, said the local tax is “being contemplated, but there’s not a firm decision if we’re going to do it.” He said Sullivan would decide by May 1, as part of his budget calculations for next fiscal year. The state estimates Braintree could collect more than $70,000 a month from the tax.

Selectmen in Sharon decided against a local meals tax in 2011, but are bringing it to this year’s May 6 Town Meeting, according to Town Administrator Benjamin Puritz. The state estimates Sharon would have collected about $126,000 in 2012 from a local meals tariff.

Some municipalities that either have imposed the tax, or are considering it, have quarreled over how to spend the cash influx. In Scituate, for example, voters will have two options when they take up the tax question when Town Meeting opens on April 9.

Selectmen have an article on the warrant that simply asks for permission to adopt the meals tax, with no directive on how the money should be spent. Various suggestions have included using the estimated $200,000 annual windfall to repair sea walls, build a new school, and move Town Hall to another site.

The Scituate Economic Development Commission, however, is asking Town Meeting to approve the tax and earmark the money for a special fund set aside for business expansion in town. The money could be used for “infrastructure improvements benefiting the town’s business districts,” market research, advertising, coordinated marketing efforts and events, as well as providing incentive for new businesses to locate in Scituate or existing ones to expand.

Cohasset Town Meeting, which opens April 22, also faces a vote on the local meals tax. The state estimates the tax could generate about $330,000 annually. Officials have not said how the money would be spent.

Johanna Seltz can be reached at seltzjohanna@gmail.com.
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