Lincoln, Cumberland see increase in meal and beverage taxes

Lincoln, Cumberland see increase in meal and beverage taxes

Andrew Schnorbus of Cumberland refills the prepared hot foods warmer at Dave's Marketplace in Cumberland. Dave's is seeing an increase in sales of prepared foods, one possible reason for a jump in meal taxes in Cumberland. (Valley Breeze photo by Tom Ward)

Lincoln and Cumberland both saw increases in meal and beverage taxes collected from last July through January of this year, a positive sign for restaurants and businesses that sell prepared foods.

Lincoln was among the top five communities in the state after posting an increase of $47,446, or 12.3 percent, from $387,174 from July of 2012 through January of 2013 to $434,620 for the same seven-month period this fiscal year.

Though Cumberland's revenue dropped off in January, when the town posted one of the five biggest declines in the state over the previous January, the town overall is up $9,997 in revenue for the fiscal year, from $218,923 to $228,920, or 4.6 percent.

Six other communities in The Valley Breeze readership area all saw increases in meal and beverage tax revenue. They are: North Smithfield, up 21.6 percent from $107,837 to $131,162; Smithfield, up 12.6 percent from $331,844 to $373,746; Pawtucket, up 9.2 percent from $363,592 to $397,217; Scituate, up 19.6 percent from $31,890 to $38,138; Glocester, up 1.4 percent from $42,436 to $43,050; and Foster, up 4.7 percent from $8,210 to $8,592.

North Providence and Woonsocket were among five communities statewide to see the biggest declines, both posting double-digit drops in revenue from meal and beverage taxes.

Local officials are having difficulty pinpointing all of the reasons for the increase in meal and beverage tax receipts, but several have attributed it to a combination of an improved economy and new restaurants.

Lincoln Town Administrator T. Joseph Almond said growth in the restaurant business at Twin River has been a factor, but a significant amount of activity also seems to be generated along Route 116.

The Breeze reported in January that meal and beverage tax revenue was up 30 percent at the Twin River restaurants since table games went in last summer.

The local 1 percent meal and beverage tax is collected on the sale of a meals and beverages that are prepared away from home, according to the Rhode Island Department of Revenue, including prepared foods. The amount of tax collected is sent back, in full, to the municipality in which the meal and beverage is consumed. The 1 percent meal and beverage tax is an addition to the 7 percent sales tax on food and beverages.

Paul Dion, chief of the Office of Revenue for the Rhode Island Department of Revenue, said that revenue statewide from the meal and beverage tax is up by 5.6 percent, or $690,000.

"We had very strong growth in meal and beverage taxes in fiscal year 2012, 7.8, percent, and then very modest growth in the same in fiscal year 2013, 1.7 percent," said Dion in an email. "Obviously, fiscal year 2014 through January has been pretty strong at 5.6 percent."

Dion said there's "no question that the prepared foods market has been improving," but it "is not clear that it is necessarily more people going out to eat."

Consumers must pay the tax on all prepared foods, whether they're buying a cooked pizza at Dave's Marketplace or a rotisserie chicken at Stop & Shop, said Dion.

"One thing that you can say for sure is that there has been an increase in the purchase of food and beverage for immediate consumption, be it at home or at a restaurant," he said.

Glenn Szydlo, manager of the Dave's Marketplace location in Cumberland, said the store's prepared food sales, especially in the pizza and calzone department, are "definitely picking up."

For monthly updates visit www.dor.ri.gov .