Meals Tax: An Alternative to the Property Tax

Posted by: Tim White
Posted on: Tuesday, June 12, 2007 at 12:44 pm
Categories: Main Streets, Financing, Home Buying, Home Selling, Main Streets, Financing, Home Selling, Home Buying, West Roxbury, Jamaica Plain, Home Buying, Home Selling, Main Streets, Financing, Roslindale

At a recent meeting of the West Roxbury Civic Association, representatives from the City of Boston’s Department of Neighborhood Services and the Office of Budget Management met with community leaders to discuss Mayor Menino’s proposed legislation to reduce both residential property taxes and business taxes in fiscal 2008 by increasing the meal tax and by closing a tax loophole afforded to the telecom industry since 1912.

“With this plan, the Mayor has made a commitment to reduce residential property and business taxes,” said Jay Walsh of the Department of Neighborhood Services, “the idea is to offset increases in the property tax scheduled to go into effect in 2008,” he said.

Presently, the meal tax in Boston is 5%–with all revenue generated going directly to the state budget.  Menino’s proposal would increase meal taxes in Boston by an additional 1% with that portion going directly into the city coffers, presumably to offset increasing property taxes.  In doing this, the cost savings to homeowners in Boston is projected to be around $200 per household per year.

The second part of the Mayor’s proposal is to close a telecom tax loophole that’s been in place since 1912.  In the early half of the 20th century, tax incentives were given to the telecom giants as a means to foster growth and to encourage “Ma Bell” to invest in a robust telecommunications infrastructure.

“It’s time to close this tax loophole that the telecom industry has long benefited from,” said Chris Julianni of the Office of Budget Management, “the tax incentive has out-lived it’s original reason for being and the telecom industry has done quite well here in Boston over the years,” he said

Additionally, it’s important to note that the current meal tax in Boston is one of the lowest in the nation of comparable cities as illustrated below.  Also, according to the budget office, the impact the meal tax will have on city residents is negligible–about $25 per year per household–while the property tax savings may be many times that.  According to a recent study, two-thirds of the meals tax in Boston is paid by non-residents (e.g. tourists, conventioneers, suburban traffic, etc).

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