The tax on meals, already set to increase to 6.25% next month, will go up to 7% Oct. 1 under a plan released today by Mayor Menino to combat a drop in state aid.
The measure goes to the city council for a vote on July 29.
Under a new state law, communities can add up to a 0.75% tax on the cost of meals - in addition to the 6.25% that goes directly to the state. This means that on Oct. 1, Boston diners would be paying 40% more in tax on a burger than they would today, if the council approves the tax.
Menino also told local restaurant and hotel operators today he will seek to increase the tax on hotel-room rates by 2 percentage points to 14.45%. Combined, the two measures would generate roughly $18 million for the city in the current fiscal year, assuming the increases go into effect on Oct. 1, the mayor said:
None of us like new taxes – we have kept property taxes steady – but as I see it, these local option tax increases would primarily impact visitors to our city, and travel, tourism and convention business remains strong. Even with the proposed increase, Boston's meals and hotel tax rates would remain lower than many other comparable cities like New York, Washington D.C., San Francisco, and Chicago.
Figures released by the mayor's office showed meals taxes ranging from 8.38% in New York to 10.25% in Chicago.
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