Friday, December 13, 2013
By Jesse Scardina firstname.lastname@example.org
Robert Pleau, owner of Pleau's Market in Winslow, hired a company to help him change his cash registers and credit card readers in anticipation of Tuesday's meals and lodging tax hike.
Robert Pleau, left, and his father Bill, owners of Pleau's Market in Winslow, today are getting ready for a mandated tax increase, which will raise sales tax a half-percent to 5.5 percent and meals and lodging tax up a percentage point to 8 percent. Cashier Lateaka Brewster, right, assists customers in background.
Staff photo by David Leaming
At Barrels Market in Waterville, employees made the adjustment themselves.
"Basically, we have a point of sale that works with a computer system. You can go in and adjust the sales tax," said Melissa Hackett, store manager. "The kind of retail we do, we need to make changes constantly depending on how the register reads certain items and we have the office end of the equipment to change it."
The tax increases — meals and lodging tax went from 7 percent to 8 percent and the sales tax rose from 5 percent to 5.5 percent — were the result of a state budget compromise crafted by lawmakers in June to avoid a possible state government shutdown.
The machinery isn't the only thing that has to be adjusted — store owners are also waiting to see how customers react to higher prices. But so far, everyone expects people will take it in stride.
"Most people who've come in to shop are aware of the changes and what's coming," said Pleau. "It adds a little more cost to everyone, but it's the law and you have to deal with it."
Hackett said that not much noise has been made by her customers about the change in sales tax.
"No one has said much about it, and it's a small enough increase that I don't think they'll take much consideration into it," she said.
Many restaurants are adjusting prices so the tax doesn't make the numbers less appealing.
"We're just going to be rounding prices to the closest zero," said Stan LaPointe, owner of the Pointe Afta bar in Winslow. For instance, if a draft now costs $3.18, it will be rounded to $3.20. The change shouldn't affect the food prices, he said.
"It's not the end of the world," LaPointe said. "Some people just need to be creative with their funds, but some can't afford to do it."
Some in the state's hospitality industry are more concerned that higher prices, even if only several cents more, could make people rethink how much they spend when they go out for a bite to eat or book a room.
The taxes on a $50 meal will go up 25 cents. For a $150 hotel room, taxes will rise by 75 cents.
"Overall, I think the danger here is any time the meal goes up overall, then folks think twice about how often they're going to go out," said Richard Grotton, president and CEO of the Maine Restaurant Association.
Another complaint is that the added revenue from the tax hike will end up in the state's coffers, not in the cash registers of business owners who have avoided raising prices themselves.
"This is sort of like a self-imposed increase by the state on people who are trying to collect as much rate as possible," said Greg Dugal, executive director of the Maine Innkeepers Association.
Geoffrey Houghton, owner of The Liberal Cup in Hallowell, said his customers generally look at the bottom line of what their meals cost and won't differentiate the amount raised by taxes.
"Unfortunately, the customer is going to notice the increase in the bill, but I'm not getting any more," Houghton said. "I'm not raising my prices because of the economy, so I'm a little disappointed the taxes are going up."
The Legislature passed the two-year, $6.3 billion budget in June with the tax increases to prevent a possible government shutdown. The sales, meals and lodging tax increases are projected to raise $183 million for the state over the next two years — $135 million from sales and $48 million from meals and lodging, according to the Maine State Legislature Office of Fiscal and Program Review.
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