Letting restaurants hold on to the revenue from the meals and rooms tax would be an easy way for the state to show its support for the industry, Menard said, even though it might not be enough to keep some restaurants in business through these challenging times.
"Restaurants are delicate businesses, and we need something immediate to help us survive," he said. "We're a major component of the economic system in Vermont, and it's a simple way for the state to say, 'We're with you. We want to help you.'"
A social media campaign pushing for the tax abatement took off at the end of last week, with chefs, employees and restaurant owners around the state posting selfies with the hashtag #Dont86Us.
In a phone interview on Monday, Chamber of Commerce vice president of tourism Amy Spear told
Seven Days that the #Dont86Us movement has gone far and wide, with patrons posting their support along with people in the industry.
“Time is of the essence for the abatement,” she said. “At the Vermont Chamber, we feel that restaurants are an integral part of our communities, and Vermont really needs them to survive this crisis so they’ll be able to reopen, hire back employees, help the economy and support our farmers.”
Vermont farms rely on restaurants as a wholesale outlet, and restaurant shutdowns will affect rural communities across the state as well as downtowns, Spear said. For restaurants, the abatement would mitigate a mounting cash-flow problem. The industry operates on tight margins, and even restaurants that have elected to close have mounting expenses.
“Being shut down in this manner, it’s important for us to try to get this investment in neighborhoods and rural communities so that the restaurants have the cash flow to survive this,” Spear said.
The Chamber is also advocating the freezing of the unemployment experience rating for restaurants. That rating, Spear explained, is tied to how restaurants use unemployment. Given that so many have had to lay off employees due to mandated closures, their ratings are likely to take a hit that would lead to increased operating expenses.
“We’re asking for that rating to be frozen so that these restaurants don’t have yet another cost associated with their business because of this public health crisis that we’re in,” Spear said.
When asked about the likelihood of the state implementing these measures, Spear encouraged restaurants and diners alike to reach out to elected officials and share the message.
“I’ve always liked the phrase ‘Democracy goes to the diligent,’” she said. “There will be moving parts that need to happen both in the governor’s office and in the House and Senate. The more you engage in discourse with elected officials, the more they’ll understand the struggles that restaurants — or any small businesses — are going through.”
In a letter shared with
Seven Days on Sunday,
Farmhouse Group owner Jed Davis echoed the need for immediate short-term cash-flow assistance.
“Our government and communities need to understand that many restaurants simply don’t have the cash to handle this problem on their own,” he wrote. “Addressing the health crisis is paramount, but we also need strategies in place aimed at positioning small businesses to bounce back when the time comes. We’re only days in, and I already know of several Burlington restaurants that are done — and I mean for good.”
Already, the advocacy from restaurants and the Chamber of Commerce seems to have had some effect. According to a Monday press release from the
Vermont Department of Taxes, Gov. Scott has “directed the Commissioner of Taxes to exercise his authority to provide relief to Vermont businesses who owe Meals and Rooms Tax or Sales and Use Tax until further notice.”
The announcement states that businesses that cannot meet the March 25 and April 25 filing deadlines “will not be charged any penalty or interest on these taxes for late submissions.”
Instead of the abatement that the restaurant industry was pushing for, in other words, the state is offering a waiver of penalties for not remitting the meals and rooms tax payments on time.
“The waiver of penalties and interest is within the current authority of the Tax Commissioner,” Secretary of Administration Susanne Young is quoted as saying in the press release. “Realizing we must be prepared to provide additional relief, the Administration will work with the Legislature in the coming weeks to explore additional stimulus opportunities for our local businesses affected by the COVID- 19 pandemic.”
The following is Davis’ letter addressing the stressors that currently face the state’s restaurant industry. He believes that his proposals “would offer much needed aid to those in my industry, impose no real long-term cost to society, help keep Vermont restaurants alive in the pandemic’s aftermath, and offer us a sense of hope.”