ARTICLE 1 - Town of Natick

ARTICLE 12
Local Option Meals Tax
(Board of Selectmen)
To see if the Town will vote to accept G.L. c.64L §2(a) to impose a local meals excise; or
otherwise act thereon.
RECOMMENDATION: By a vote of 8-3-0 on September 15, 2009, The Finance
Committee recommends FAVORABLE ACTION with regard to the subject of
Article 12.
The FY 2010 state budget added two revenue-generating opportunities for municipalities:
A new local option excise of .75 percent on sales of restaurant meals
originating within the municipality
A local option to increases the maximum rate of the existing local option room
occupancy excise from 4% to a maximum of 6%
Town Meeting approval is required to adopt these local options; this Article addresses
only the local option .75 meals tax. If this option is accepted prior to December 1, 2009,
FY 2010 revenues are projected as follows:
Local Meals Tax $176,661 (estimated receipts, FY 2010)
The revenues for FY 2011 are obviously higher as they would be attributable to the full
fiscal year:
Local Meals Tax $423,987 (estimated receipts, FY 2011)
PLEASE NOTE THAT THE FOLLOWING DISCUSSION POINTS ARE FOR
BOTH ARTICLES 12 & 13 AS THEY WERE REVIEWED AT THE SAME TIME.
During the review of Articles 12 & 13 it was noted:
Most locally accepted laws can be repealed after three years.
The procedure is that these taxes would be collected by the Department of Revenue
(DOR) using the mechanisms already in place, and paid into the Town on a quarterly
basis. It is unconstitutional in Massachusetts for municipalities to collect any taxes
other than property taxes.
Revenue estimates have been based on data provided by the DOR based on current
meals and hotel taxes. Since meals taxes are currently not tracked by the DOR in
terms of the town in which a restaurant is located, there could be some refinement of
the estimates needed. Additional procedures will need to be put in place at the DOR
to facilitate this further analysis.
Although this issue relates to a policy of the Town, it is not one on which the Board of
Selectmen will make the final determination, due to the way the legislation was
written. It is therefore not necessary to wait for the Selectmen to make their
recommendation before taking a vote of the Finance Committee.
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