State should let restaurants keep sales tax to stay afloat
Every dollar matters to restaurants, as they are scraping to get by under state-imposed restrictions during the pandemic. An idea by two Lehigh Valley lawmakers to help them should be fasttracked.
Sen. Lisa Boscola and Rep. Gary Day wantto let restaurants keep the state sales tax they collect.
That’s fair, considering that state officials played Scrooge and stiffed restaurants and other small businesses last month. The state was sitting on $1.3 billion in federal coronavirus aid that originally was intended to be distributed to businesses and organizations. But the state kept the money for itself.
Merry Christmas, right?
The state took advantage of a change in federal rules that gave it more leeway to use the money to cover governmental expenses related to COVID-19. That was the easiest waytobalance the budget, and saved lawmakers and the governor from making difficult decisions.
Letting restaurants keep the 6% sales tax is one way state officials can make up for their selfishness.
But not all restaurants should qualify for that break.
Those that have continued indoor dining that was supposed to be shutdown onDec. 12 should be ineligible. Theycan’t have it both ways.
The restaurant industry is struggling mightily during the pandemic, and owners and employees right fully are frustrated by restrictions on their operations. But I don’t believe that all restaurants that are still seating diners are doing so because they’ll die without indoor dining.
Someare making a political statement. State and local officials aren’t being tough enough on them. They’re creating an uneven playing field.
The lack of enforcement isn’t fair to restaurants that have closed their dining rooms to comply with the governor’s order. Whatkindof message is that sending? Follow the rules and lose business to your competitors that are breaking the rules?
Restaurants not in compliance also should be prohibited from receiving any of the pending new federal coronavirus aid that the state receives andcanallocate at its discretion. That plan is expected to include about $325 billion in relief for businesses nationwide.
This isn’t the first time that Boscola, a Democrat from Northampton County, and Day, a Republican from Lehigh County, have tried to help restaurants by not requiring them to pay sales tax.
They both floated the idea earlier this year, with Day introducing legislation that was co-sponsored by Rep. Ryan Mackenzie, a Republican from Lehigh County. That legislation was not voted on and expired.
Boscola and Daysay they plan to introduce legislation in the session that starts next month. Boscola told The Morning Call’s Ford Turner last week that she believes Gov. Tom Wolf also could enact the sales tax break through executive order, under his emergency declaration.
Boscola said in a legislative memothis month that her proposed legislation also would apply the tax break to bars, nightclubs, hotels and other liquor licensees, through the end of next year.
“While I understand that this will have an impact on the state’s bottom line, we owe it to the tens of thousands of small businesses in our state to help them to survive,” Boscola’s memo says. “Their survival is a marathon race; it’s not a sprint, and it likely will take years before these businesses see the consistent revenueswhichwerehadpriortotheCOVID- 19 pandemic.”
Day said in a legislative memo that his proposed legislation would apply to restaurants and last “until restrictions are removed, and they are able to operate at 100% capacity.”
If the forgiven taxes leave a hole in the state budget, officials can dip into the state’s Rainy Day Fund of about $240 million. Or the state Legislature can cough up some of the $172 million in taxpayer money that it has hoarded in a budget surplus.
Two other state lawmakers want to tap the Rainy Day Fund to create a $200 million grant program for bars, restaurants, caterers and banquet halls. Reps. Joe Ciresi, D-Montgomery and Tina Davis, D-Bucks, said in a legislative memo Friday that their plan would cap the amount each business could receive, to ensure that as many as possible could be helped.
They also had introduced similar legislation this year that expired when it wasn’t voted on.
State officials, including Gov. Wolf, repeatedly have called on Congress to release more funding to help businesses and individuals who are struggling during the pandemic. The state needs to step up and do more, too.
Asales tax holiday for restaurants is an easy way to help.