JACK EVANS REPORT

This week, I chaired a meeting of the Committee on Finance and Revenue to consider a bill to require mobile vendors, including food trucks, to pay sales taxes. The bill amends a section of the District’s tax law that currently exempts sidewalk and mobile street vendors from sales tax requirements.

Currently, sidewalk and mobile street vendors, including food trucks, pay a quarterly fee of $375 to the District in lieu of having to pay sales taxes the way other food service businesses must. Members of the public and other stakeholders have pointed out that this is not a fair system, and the evolution of the mobile vendor market requires a modernization of our tax laws. A writer for the Washington Blade recently called the current quarterly fee “a token alternative annual payment initiated several decades ago” and advocated for “sales tax parity” as found in the bill I am sponsoring.

Legitimate concerns have been raised by the food truck industry about the need for comprehensive regulatory reform that more accurately takes into account their true corporate structure and business activities. At my hearing last year, for example, the executive director of the D.C. Food Truck Association testified that, like storefront restaurants, mobile vendors should be licensed and taxed as businesses rather than as sole proprietors. However, requiring individual street vendors to have a vending license, she says, makes about as much sense as requiring an individual waitress in a restaurant to have a business license. I tend to concur. Regardless of the merits of that argument, though, the subject matter of corporate form is not within the purview of my committee, but rather is being addressed by regulations from the District’s Department of Consumer and Regulatory Affairs (DCRA). Comments on the proposed rules were due March 1 and are posted at dcra.dc.gov.

The bill I moved this week has been subject to debate and public comment since at least March of 2011 and would not propose to implement the tax until October 1, giving plenty of notice to the industry while also allowing a reasonable amount of time for the regulations to become effective prior to implementation of the sales tax. As noted by the writer quoted above, however, “there is scant evidence of public support for continuing to exempt the[se] businesses from the standard sales tax levy” or allowing the sales tax issue to remain unresolved while the regulatory process is completed.

Also this week, I chaired a hearing on my proposed bill to repeal the out-of-state municipal bond tax. I have heard from many constituents about the hardship and unfairness of changing a law that impacts so many seniors after they have already relied on the tax break in good faith when making their retirement plans. While the hearing has already taken place, the record will remain open until March 9. If you have time to send a letter to my staff kstogner@dccouncil.us in support of the bill by next Friday, we will include it in our official record to help demonstrate the support we need to convince the Mayor and the couple of swing votes on the Council we need to repeal this tax.

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Tue, 2 Sep 2014 00:18:26 -0400

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