Suozzi’s proposed tax may seem tiny, but it could add up for QSRs

Suozzi’s proposed tax may seem tiny, but it could add up for QSRs

Late last month Thomas Suozzi, county executive for Nassau County on Long Island, N.Y., put a fast-food tax proposal on the legislative menu in hopes of fattening up his county’s thinning coffers.

The proposed tax, part of Suozzi’s “Healthy Nassau” initiative, encourages residents to eat more healthfully. But if the measure were passed, what it really would do is impose a 2-percent tithe on the cost of, say, any item sold at quick-service restaurants in the county.

This 2-percent tax would be imposed on top of the 8.5-percent sales tax already in place at all retail establishments. So, for example, a customer purchasing a Triple Whopper with Cheese for $5.39 would actually end up spending $5.85.

According to reports, the tax could generate approximately $11.8 million in 2010, which would help offset a projected budget shortfall of some $72 million.

But the real question is, what would this tax do to the restaurateur, the franchisee, who is struggling to get by as more customers opt to eat at home rather than spend discretionary dollars dining out?

What’s more unfair is the fact that independent pizzerias and Chinese restaurants would be exempt from the tax.

Clearly, Suozzi, who heads up the executive branch of Nassau County’s government, assumes it is the big chains that would bear the brunt of the tax. But he clearly is not thinking of the small businessman who may own one or two units and is just trying to break even during this recession.

Then there are the customers. Would they be willing to spend the additional money for their Quarter Pounder fix? In this day and age, it’s kind of hard to know. Even though, on the face of it, 2 percent is not all that much, it still is an increase. Those struggling to make ends meet may feel those ends don’t justify the means and forgo the purchase altogether.

While the fast-food tax may have seemed like a good idea at the time, many of the local politicians governing the county now are backing off of it, saying they won’t support the measure if it comes down to a vote. Of 19 legislators, 11 have reportedly said they would vote no on the bill. Even Suozzi now appears to be backing down. Officials in his office recently claimed that the tax increase was only being considered as a “contingency doomsday plan,” and that “Nassau County residents do not have to worry about the tax.”

But if Suozzi’s proposal does end up becoming law, and we probably won’t know whether it will until September or October, a lot of regular Joes may discover that quick-service fare is, in fact, too rich for their blood—or at least their pocketbooks.— [email protected] [3]