Photo by PoPville flickr user Mr. T in DC
From a DC Food Trucks Association press release:
Under current regulations, a proposal for mobile vendors to collect sales tax opens the door for double taxing food trucks and could even make individual employees responsible for the business’s taxes.
“If the Sales Tax Act passed today it would create a scenario on par with requiring each server in a restaurant to collect and submit sales tax for the entire business,” said Che Ruddell-Tabisola, Executive Director of the Washington, DC Food Trucks Association.
“The Sales Tax Act shines a spotlight on how badly we need Mayor Vincent Gray’s proposed new food truck regulations, which update decades-old vending rules and make it possible for food trucks to collect sales tax,” Ruddell-Tabisola said.
Under current food truck regulations, a vending license holder, typically the owner, must be present on the truck for it to operate. For the food truck to operate without the owner, he or she must obtain additional vending licenses for employees. As a result, a single food truck has multiple licenses holders, each of which pays fees as if it were the business owner.
The Sales Tax Act would make each license holder responsible for the business’ sales tax and could possibly require each employee to pay the business’ full amount of tax collected, resulting in a food truck paying double, triple or even more the amount of tax actually collected and threatening the ability of the food truck to remain in business. Moreover, it would unfairly subject individual employees to personal liability for the business’s tax obligations.
Mayor Gray’s proposed new food truck rules would update regulations to require just one vending license per food truck and make it possible for food trucks to collect tax as intended by the Sales Tax Act.
“We don’t believe the Sales Tax Act’s intent is to threaten the viability of food trucks, but obviously it cannot be passed with the current food truck regulations still in place,” Ruddell-Tabisola said. “It only makes sense for the tax act to be adopted in tandem with passage of the Mayor’s proposed new food truck rules.
“The Sales Tax Act is a step in having food trucks treated like real businesses,” Ruddell-Tabisola added. “Our members welcome the recognition that we are real businesses and look forward to serving as a means to provide additional revenue to the District. It’s what we’ve always said – food trucks are good for the District.”