Food & Beverage Tax

A Bridge to Knowledge

What is this tax all about?

Election Season has kept your Town Councilors pretty quiet about this topic. I guess more taxes isn’t popular to talk about BEFORE elections…..

This tax is supposed to raise money in order for Merrillvilled to build a new Lake County Visitor Center. The current LCVC is located on Kennedy Avenue in Hammond, IN just south of I-80/94. Current Town Council Members Shawn Pettit (D-6) and Rick Bella (D-5) would like to convert the old Service Mercxhandise / Burlington Coat Factory store (of the old Century Mall) into the Visitor Center.

Other possible uses include helping White Lodging Services build up its current property into “The Farm” resort. This would be where the Twin Towers, Star Plaza, and Radisson Hotel were located.

And that’s the problem with this tax. It really has no particular purpose other than “economic development.” Which means the funds will go to pay for poorly planned projects from the past so the Town does not go bankrupt.

What does it tax?

Any food or drink prepared in a restaurant, bar, gas station, grocery store, etc. This includes any meal bought at McDonalds and the like. What most do not realize is that it also includes things like prepared at grocerey stores. Running to Strack’s for some of their yasty broasted chicken? Taxed. Running to Meijer for some fresh sushi? Taxed. Want to grab a taquito or hot dog at Speedway Gas Station? Taxed.

It is actualoly alarming the things that can be covered by this tax. It applies to things you don’t think of at first.

How much is the tax?

The tax is an additionalk 1% added on to the total sales.

Why is 1% such a big deal?

Typically 1% is not a big deal. But, after time it becomes a big deal. The whole point of the tax is seem innocent and affordable. This can end up being far from the case.

The average American eats out (purchases prepared food) 3 to 4 times a week. Over a year’s time, this could amount to $35 to $50 per year – or more – per person. For a family of 3 or 4, this could mean an additional $200 in tax each year. That is significant.

Who will be impacted the most?

Shawn Pettit (D-6) and Rick Bella (D-5) would like you to believe that “transients” will pay most of this tax. Transients are not homeless people in this context. It simply means non-Merrillville residents. This notion is more of a fantasy rather than based in fact. It is based in the idea of the old Merrillville that was a destination for shopping and food. This is not really the case.

in addition, it is based in the notion that many people come to work in Merrillville and there for get their meals on the go here. This is also not as true as it once was. The COVID lockdowns changed all of that; More than ever, people are working from home. This means less people visiting local burger joints for a quick lunch.

This leaves Merrillville residents shouldering most of this tax burden. Unless you want to drive to the next town over, you will get stuck paying this tax. And, when your hungry or cramped for time, will you worry about the extra 50¢ to $1 tax to drive further away? No.

Much like “sugar taxes,” “soda pop taxes,” and other “vice” taxes, the food & beverage tax will hurt the poorest of our communities the hardest. People who can afford to “pay the tax” also typically shop at Costco & Sam’s Club stocking up on good deals. They have deep freezers and cupboard space in their pantries. the people who eat out the most are actually the poorest among us. They do not have toe means to purchase or store food in bulk.

The idea that a food & beverage tax is a “luxury” tax for the “rich” is simply not true. It is the same way with gambling destroying poor communities more so than rich communities.

Finally, businesses are impacted. Businesses have to foot the bill for this tax. They have to collect the tax, report the tax, and pay the tax. This will take up time and resources. This additional cost will be reflected in higher prices. Businesses will not pay this extra cost out of the goodness of their hearts – they are a business, NOT a charity. For small, family owned businesses, this may add an additional point of pressure to deal with. Small business is the backbone of America and this does not help them stay in business against bigger chains.