New Optional Environmental Restaurant sales tax in DC?

“Dear PoP,

A friend of mine has gone to the newly opened We the Pizza on Capitol Hill (305 Pennsylvania Ave SE) where a specialty slice of pizza is $4. When paying he was charged $4.44 instead of the $4.40 which is what is expected given the 10 per cent restaurant tax. The manager, when asked, said that the extra 1 per cent was “environmental” and that he didn’t have to pay it.

What gives here?”

Has anyone else heard of this tax? Is it really optional?

Update: Thanks to @Capital Spice for sending a link to Chowhound which explains:

“Far from it. Good Stuff Eatery, which promotes recycling and whose kitchen staff uses “bio-smart” towels, prides itself on “trying to be as green as we can,” says Catherine Mendelsohn, the restaurant’s director of operations and mother of chef Spike Mendelsohn, formerly of TV’s “Top Chef.”

The enviro charge is “around 1 percent” of the bill, she explains, and “if anyone disagrees with it, we’ll remove the charge.” (So far, she has had no takers.) Why not just add the cost to the price of a meal? “I like people to know what they’re paying for,” says Mendelsohn. — Tom Sietsema”

And since we’re talking about it, how’s the pizza here?

98 Comment

  • Hmmm… interesting idea there, charging people for optional fees, and not revealing this to the customer until they ask.

    I’d like to refer to this interesting accounting practice as “bullsh*t”.

  • What constitutes “environment”? Spending on more astroturf dog parks? Removing lanes of traffic?

  • Same guys who own Good Stuff Eatery, so hopefully it will be good pizza.

  • Yeah, sounds like a 1% arbitrary-markup-but-if-you-call-us-on-it-we’ll-just-drop-it tax. pretty cheeky.

    • Reminds me of the ‘hazardous waste’ fee or ‘shop materials’ fee with an oil change. It’s just a way to weasel more money out of the customer without being upfront about it. Sketchy sketchy sketchy.

  • As I see it, they can charge whatever they like, as long as their customers put up with it.

  • There is no \environmental tax.\ See http://cfo.dc.gov/cfo/cwp/view,a,1324,q,612636.asp for a list of other taxes.

    According to http://cfo.dc.gov/cfo/cwp/view,a,1324,q,612629.asp, the sales tax on restaurant meals is 10%, of which 9% is general revenue and 1% is specifically for the Convention Center fund. Maybe the restaurant is charging the 1% on top of everything? If so, they shouldn’t be. Or maybe they’re charging 4 cents instead of 5 for bags? Or they could just be ripping folks off. PoP, why don’t you call the restaurant and ask?

    • Thank you sb.
      I am the originator of that question that PoP has kindly thrown out to you, his readers.
      I (and PoP) knew that someone out there would know the answer.
      Any suggestions on whom to involve to investigate this officially?

      • Prince Of Petworth

        Here is an update:

        Update: Thanks to @Capital Spice for sending a link to Chowhound which explains:

        “Far from it. Good Stuff Eatery, which promotes recycling and whose kitchen staff uses “bio-smart” towels, prides itself on “trying to be as green as we can,” says Catherine Mendelsohn, the restaurant’s director of operations and mother of chef Spike Mendelsohn, formerly of TV’s “Top Chef.”

        The enviro charge is “around 1 percent” of the bill, she explains, and “if anyone disagrees with it, we’ll remove the charge.” (So far, she has had no takers.) Why not just add the cost to the price of a meal? “I like people to know what they’re paying for,” says Mendelsohn. — Tom Sietsema”

        • It would be preferable, I think, to not call it a ‘tax’, since that implies that it’s sanctioned or required by the city or other gov’t. This, of course, makes people think it’s unavoidable and that they must pay.

          Unless they are expressly explaining the 1% to each and every customer, they should come up with a better term for it and itemize it on the receipt.

          My two cents.

  • technicalities, just legal technicalities. what’s with you and all yer “rules, rules, rules”? (kidding)

  • This is dumb, don’t pay more taxes than you have too. I think 10% tax for restaurants is already really high!

  • I went by there a couple of weeks ago and couldn’t get pizza because they were “out of dough”
    I thought that was pretty funny.

  • This is unbelievably shifty. Umm, if you want people to know what they are paying for, then why don’t you TELL THEM THAT before you add it to their bill?

    I’m happy that they use “enironmentally friendly towels.”

    Lots of other businesses also do that without adding an illegal surcharge that was not told to the patron before the purchase. Hell, Target gives 10% of their profits back to the community! Should they add that on to the sticker price?

    Raise your prices if you feel it’s necessary, this is just wrong and should not be tolerated.

  • “I like people to know what they’re paying for,” says Mendelsohn. — Tom Sietsema”

    That’s crap!

    If he wanted them to know what they were paying for AND that it was optional then this question would not have needed to be asked.

    I already have a bad taste in my mouth about this.
    Admittedly a small thing, but nobody likes to be made a fool of.

  • Also, it sounds illegal.

  • Why doesn’t anyone know about this? Is this like when somebody forgets to pick up the change or ask for their deposit back, and the business keeps it?
    Let the Boycott Begin.

    • If a business keeps your money (deposit, overpayment, you lose a check and they don’t reissue it), they are required to remit that money back to the State in which they do business. The State then advertises this “unclaimed funds” and gives you an opportunity to claim them. The States conduct periodic audits in search of it.

      As for adding a surcharge (which this is), I suspect it must be separately itemized on the receipt and a notation on the menu. It could be considered equivalent to a delivery fee.

      As for people not complaining, it’s because most don’t know sense you don’t tell them you are doing it.

  • This is extremely shady. I have eaten there. The Italian sodas were very delicious.

    The pizza was just OK. I think you are much better off with 7th Hill if you are looking for pizza in the area.

    I went the first week or so they were open, so i understand there were lots of kinks to work out, but the service was terrible, the wait was long and they got my order wrong.

  • Not illegal.

    • Not being a lawyer I don’t know the legality.
      I bet you don’t either.
      Without knowing the legal status, it is shady. It is deceptive. It is wrong to charge people unknowingly.
      Why don’t THEY contribute that 1 per cent?
      Please keep your hands out of my pockets (not you, We the Pizza).
      Not going.
      I live near Pete’s in Columbia Heights. Pete’s rules. Although I wonder if they do this. I know that Sweet Green on Capitol Hill does not.
      I’m on the lookout now.
      We the Pizza has raised my consciousness of greed and evil.

  • What “sounds illegal” about this?

    It’s been a while since I’ve looked, but I’m pretty sure the receipt includes a line item called “Enviro Charge.”

    That’s the phrasing they use. There’s nothing saying they can’t impose an enviro charge…or a napkin charge…or a plate charge…or any other charge they want.

    Most places roll all of those charges into the cost of a dish so they don’t have explain why they’re charging you an extra $0.04 for that plastic cup you’re using. The Mendelsohns decided to go the other way and break this specific charge out on their receipt.

    I don’t know if it’s a good idea or a bad idea to do it this way versus another, but it would probably be received better if they advertised it up front.

  • I have never in my life heard of a “optional” enviro tax that no one knew about, nor was advertised.

    Where does the money go? What is it used for?

    Seriously, sounds like a regular ol style grafting tax that the business hopes no one notices but plays off as a “option” when someone does.

    And I have never seen a line item on a reciept in dc that said enviro tax. Now I am going to have to specfically go through each tab and ensure there aren’t others in dc charging it.

    • The OP called it a tax, the proprietor called it a charge. It’s the equivalent of a surcharge, as I mentioned above and as Capital Spice has suggested.

  • It goes against what customers are used to and what they expect. This is good when it is a good thing, not good when it is not.
    The price of the item you are buying reflects the overall costs and expected profit. Enviro charge is vague and does not constitute any one thing in particular.
    A store could charge for napkins and plastic forks if they wanted to, but then you would pay for the amount of product you are buying.
    No, I am sorry, this is sleazy and goes against the culture of eating out.

  • Will not go to the restaurant because of this deceitful practice. Encourage others to boycott as well. Until business drops off, they will continue charging the “tax”.

    • dumbest comment on this post. and their are a lot of dumb comments. The charge is listed on the receipt. The update on this blog said that it goes to pay for all the extra steps the restaurant goes through to make their business green. If they wanted to be deceitful the owner would just charge you more and not tell you about it. Instead they decided to tell you (i.e. put the charge on the reciept).

      Friggin dumb A@@ people READ.THE.POST. CHECK.YOUR.RECEIPTS!

      • I believe that the owners’ philanthropy is his own business.
        How would you like it if he added 1 per cent to support Hamas? The PLO? The JDL? Tea Party? He has taken his interest and has made it yours. He hasn’t consulted you.
        If that’s OK with you I’d like to make some decisions for you as well.
        Just charge me for what I want to buy.
        Put a collection tin by the door, why don’t you.

      • Yes, but by the time you’ve checked your receipt, you’ve already paid for it. That’s the problem. You can’t say something is optional after you’ve already been charged for it.

  • What I find interesting is that I doubt the people who came up with this idea thought that it was a brilliant way to scam their customers without them realizing but instead probably thought it would be a good way to draw attention to the fact that they are an environmentally friendly business. That person was stupid though. Anything that looks like a tax on a check but turns out to be an optional charge is going to rub me the wrong way, even if it was used to save drowning puppies.

    • Stupid is right! How much extra money do they actually collect? It can’t be much. Of course, extra is extra and is nice from their point of view. But THIS exposure and polemic can only be bad any way you look at it.

      • Agreed…

        Lets assume for a second that they do $1000 dollars a day in business (not hard to imagine with basic pizzas costing $20 bucks), or 365K a year in gross reciepts, that means they collect an extra $3600 dollars a year in off the books revenue. Not enough to upgrade their delivery van to a BMW Suv, but enough to offset a non insignificant volume of costs, cleaning, supplies, utilities etc.

        But seriously, the bad press alone is worth a minimum of tens times that in losses. We all know how fast rage flows through blogs and how quickly this place can find itself in a good old fashioned boycott.

        If their intent was sincere, then their execution was horrible. You don’t put an additional charge on a bill without announcing it…I don’t care what its for, and not expect people to get upset when they find out about it.

        • $1000 a day in trade would be $365,000 a year.
          Have you see how many people they have working there.
          When I looked in there were almost as many people working behind the counter as there were customers!
          OK that doesn’t tell you anything. Without exaggeration there were at least 15-20 people behind the counter.
          Maybe even more.
          How do you pay salaries and other overhead if you take in only $365000 a year. I know this is not meant to be a real figure by any means. I think they would have to do a million dollars worth of business to break even.
          So, at that rate 1 per cent is 10K.
          Not such chump change except when you consider it came from the chumps who gave it up.

  • THE BOYCOTT HAS BEGUN!

  • By the way. I stopped going to Firehook on Capitol Hill when the cashier short changed me intentionally. Only a few pennies, but intentional. When I challenged her she said that she was just rounding out the price and justified it by saying that I sometimes take pennies from that jar on the counter to aid in my purchases, which I HAVE NEVER DONE AND NEVER WILL.
    End of story. End of business.

  • POP – I would recommend changing the headline of the post, it’s overly journalistic (i.e. misleading). The OP calls it a tax, the proprietor a charge, and you use tax.

    It can’t be a tax, restaurant’s can’t impose taxes. They collect (sales tax) them for the State, but can’t impose. It’s a surcharge. If you have a copy of the receipt that you can post, it would certainly clarify the issue. I fear your power and influence will put this pizza man out of business.

    • Yes of course it matters from a technical and semantic point of view whether this is a tax or a charge.
      BUT A tax is a charge and this charge is uncalled for.
      I think it makes little difference to the customer except that the customer is more put out when he/she finds out the charge is imposed by the establishment and is optional.
      This merchant is in trouble whether it is called a tax or a charge.

      • Taxes aren’t optional, this charge is. If you don’t agree with it, exercise your option out of it. As mentioned above, the charge is itemized on the receipt, so they are telling you they are doing it.

        • You mean they are telling you that the have DONE it.
          Don’t you?

          • I’ve not been, I’ll never go, I don’t care to pay $4 for some celebrity enviro pizza. If you pay first, then get your receipt it’s done. If you eat first, then are presented with the bill, it’s doing b/c it’s optional and on the receipt, so it’s not done until you decide to pay it (or not).

  • No taxation without gentrification!

    That’s my new license plate.

  • Have any of these posters actually been to We, The Pizza? Just asking if this is real outrage or bored-yuppies-on Computer-outrage? I’m guessing the latter.

    • Your question is quite dumb.
      The issue here is not the particular restaurant but the practice.
      Does it make a difference if one has been or not?
      Think man. Think!

      • oh I have thought. And if you haven’t gone yourself how can you be mad about an “undisclosed tax”. For all we know, their is a really big sign that says “a 1% fee is applied to your bill to help defray the cost of environmental services.” For all the people bitching know….it is posted. I am not saying it is posted but i am saying ‘don’t complain unless you have gone and checked it out for yourself.’ So far no one here has proven that it is or isn’t posted.

  • I’ve been ab out 5 times but always turned away due to the long long long line.
    I am now much less inclined to go.

  • Not disclosed. Not optional. It infuriated me — when I got home and noticed it on my bill. Also, the pizza was not at all delicious.

  • Also, it’s based on a percentage of the sale. If that’s not a tax in name, it’s certainly a tax in deed.

  • They could better promote evironmental sustainability by offering washable flatware, plates, and glasses for eat-in customers. That would be the genuinely “green” approach, and the one taken by Pete’s in CH.

    I’d also prefer to see pizza places offer either a reusable box option or better cover the box bottoms to avoid grease absorption (and promote recyclability)

  • Someone mentioned the small amount collected over a year (I think they said 3600, the number is not important)as unreported income. I don’t think so. I can’t see a reason that this would not be income.
    ALSO, some have mentioned that this is a good cause so why don’t be contribute to it. We don’t want to contribute to it because the jacked up prices are supposed to include overhead. If the owner cannot arrive at a fair market price legitimately but relies on underhand methods this is not a good thing. Perhaps he should not be in business.

  • back to the original point, how is the pizza?

    • Actually, as the author of the question, this was not the original point but one added by our most esteemed PoP and, to my satisfaction, has proven to be little distraction from the actual point which was the “environmental charge” If you want to know about the Pizza I advise you to go to Yelp.

  • Who cares about a penny when paying $4.00 for a slice of pizza in the first place? If you don’t like it then buy your pie elsewhere.

  • I hate to leave this lively discussion but I have a Groupon that I am using tonight at the Rocket Bar. $10 for $25 worth of drinks. That’s what I call a happy hour!
    (Expires Aug. 31)

    • Ouch! I have that Groupon and didn’t realize it expired so soon! Not likely I can fit it in. Anyone want to buy mine?

  • Do they have strombolis?

  • My main issue isn’t the charge, but the assertion behind it. Where do the owners of Good Stuff Eatery get off the train claiming to be “environmentally friendly”? ALL of their utensils, packaging, and cups are disposable. Everything must be thrown away. Hardly a paragon of green-mindedness.

  • I once saw someone complain about this at Good Stuff, and after much hassle, involving about 5 employees, the charge was removed.

    The charge is clearly shown on the receipt. However, I don’t remember ever seeing it posted BEFORE you order.

    As for the legality of it, and whether or not they pay taxes on this amount, I will leave that up to the proper authorities.

    As a customer, it just leaves a bad taste in my mouth and seems like they are trying to get away with advertising one price, then charging you a higher price. Then being smug about it by bragging about special towels.

  • surprises on my bill piss me off, and i hate arguing about shit like that to a cashier. i’d rather not have the hassle.
    clearly they don’t need my business.
    no loss.

  • I am not so poor that 5 cents makes a difference to me. Too bored by this to get angry about it.

  • I’m keepin’ it green by keeping the 1% in my pocket and NOT driving, or going, to this place. Instead, I’ll be making my own enviro pizza. Mine the Pizza.

  • I guess I’d be fine with this if it was displayed prominently on the order board so you could know about it before your ordered.

    But apparently it’s not.

    I’m not a lawyer, but I’m pretty sure that the advertised price is what you are supposed to pay, not some other made-up price, no matter how worthy the cause.

    I haven’t been to this pizza joint. But I have been to Good Stuff eatery.

    The quality there has gone down hill considerably. Particularly, the size of the burgers. They are noticeably smaller than when they first opened.

    I thought maybe I was imagining this until several of my friends said the same thing.

    Now unless you order the ‘double’ then you end up with a really tiny burger. Tasty? Yes. But for the price I expect a decent size burger, like when they first opened, not the tiny things they now serve.

  • Sounds like they could have avoid the enviro tax/charge by placing one of those good old-fashion tip jars on the counter with a quote like…Tipping is good Karma and good for the environment!

  • i’m a lawyer. it’s not illegal. people think anytime something feels “wrong” it’s against the law. not true. businesses can charge what they want. read the statutes. second, the pizza at we the pizza is THE BUSINESS. not joking. it’s.that.good.

  • Visited for the first time this past Monday. Paid my $4 and waited 10 minutes to get a single piece of lukewarm, moderately tasty pizza. I noticed the enviro charge at the time and wondered about it – it’s listed on the receipt just under the sales tax. It seems deceitful if they don’t tell you in advance that this will be charged, and I don’t recall seeing it explained anywhere (I had plenty of time to read the menu while waiting).

    I expect that business owners will price their products or services to cover their costs, not include extra charges not advertised before the sale to cover their claimed additional costs of running an environmentally friendly establishment.

    Now that I now what they’re doing, on top of the so-so pizza, I have even less desire to return.

  • I think Ticketmaster has won – after ten years of actively paying facility fees on top of ticket prices, I cannot bring myself to consider this an issue. I don’t actually see a difference between accounting to the consumer for recycled paper towels at Spike’s pizza joint and for any paper towels at all at any performing arts venue in the country. (It’s not Ticketmaster’s fault, really – it’s an accounting mechanism to separate out show revenue from facility maintenance – but Ticketmaster is evil therefore I would like to blame them.)

  • Optional?

    Next door at Bad Stuff, $10 lunch bag + 10% tax ($1) = $11.10? When I asked how that Math works, neither the cashier nor the manager was able (or willing?) to tell me that there’s a 1% enviro charge, much less what that 1% goes to, and they definately didn’t say it was optional.

    As another yelper pointed out – “I know 1% won’t kill me, but don’t get all “eco-friendly’ on me when your presentation of food is the biggest waste of materials I have seen since a Lunchables box. They seriously wrap up the burgers, put them inside a paper bag which they staple, and then put that paper bag on a tray with another piece of paper below it.” My thoughts exactly!

    As for the pizza – yummy stuff but the customer service isn’t any better than their next door neighbor. Plus I love how the advertised curb side pickup is optional – only when staff are bringing out special orders for the cops! Otherwise, SOL.

  • Seems like deceptive business practices to me.

    If they print my receipt and I ask them to remove the tax, then they have to print me a new receipt doesn’t seem very environmental.

    Know what is environmental, more transparant, and probably nets more money? An old pizza sauce jar labeled: Donations to Save the Earth (Disclaimer: Actually lining our pockets)

  • mother of chef Spike Mendelsohn, formerly of TV’s “Top Chef.”

    The enviro charge is “around 1 percent” of the bill, she explains, and “if anyone disagrees with it, we’ll remove the charge.” (So far, she has had no takers

    Just what exactly is around 1 per cent? And as far as no takers, it hasn’t gone unnoticed and I haven’t seen a single positive response in these comments about paying it.

    And … when are they (We the P and G Stuff) going to respond?

  • If the additional cost of using enviro-friendly materials is included in the overhead markup, then a customer pays sales tax on that cost, whereas if it’s a surcharge then I believe you’re not paying sales tax on that 1%. As far as I understand, the business isn’t paying taxes on materials costs that are being passed on to the consumer, so this would in effect allow the business to keep product prices relatively lower for customers and reduce the cost of sales tax liability at the cash register as well, and at the same time use environmentally-friendly materials (essentially a tax credit just like when you buy energy efficient windows, except you don’t have to request it later).

    Now, I’d agree that to be _really_ enviro friendly they should reduce the packaging they are using. AND they should certainly post the optional 1% enviro surcharge on their menu and at the register. If they’d done that up front they might have avoided all this angst.

  • Ben,
    What you have said is interesting and slightly off point, which is the sly way the business has gone about this process.
    Perhaps more to the point about the environment is that we do not know what standards if any the business has adopted and from the anecdotal information here and the sparse information from the the merchant it has something to do with towels. Indeed, this is not a green establishment from what most people who have addressed this issue have said.
    Perhaps if if were it would go some way to justify the method of imposing a charge rather than raise the prices.
    Nothing, however, can mitigate the shady way in which the merchant collects the money.

  • Given that it’s a private restaurant, and not the DMV, folks who think the practice is “shady” are more than welcome to fuck right the Hell off.

    God, some folks are achingly sensitive souls.

    • How did the DMV get into this?
      I don’t believe you have said anything at all constructive, interesting, or remotely related to the topic, but have managed to be unnecessarily insulting.
      Wanker.

  • Thanks for your response Richard.

    I was responding to all the above comments about how it would be preferable to have the ‘environmental costs’ included in overhead and passed on in the price of the item purchased. My point was that they are actually reducing the end cost for the consumer by making it a surcharge, albeit by a fractional amount, while at the same time paying the costs of using environmentally friendly materials.

    You’re right, though that they have failed on the communications side, and I’d absolutely like to see some transparency of how the surcharge is being used, as well as an upfront notice. I actually think if they had posted something they might have gotten some kudos for the move instead of calls for a boycott because they are perceived as shady for just tacking it on the receipt at the point of sale.

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