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The slippery slope and blurred lines of the Omaha restaurant tax

Columnist tries to discover the definitive line of where the Omaha restaurant tax is applicable.

Photo Editor

Published: Tuesday, September 10, 2013

Updated: Sunday, December 8, 2013 14:12

Salmon

photo by J. Christoffersen/ The Gateway

Pan seared salmon at the Claim House in the newly remodled Ramada on 72nd and Grover

In the last several years there are few public issues that have created controversy like the Restaurant Tax that was implemented in Omaha.  So much so that it deserves the proper English pronunciation con-trahv-er-see, heavy emphasis on the “trahv.”

There are several sketchy issues that arise along with this newly enacted “specialty” tax, but first let’s cover the basics.  As almost every living being has discovered in the last several years there is an additional 2.5 percent tax added at any restaurant or drinking establishment.  
The official statement from the City of Omaha takes this further to include bed and breakfasts, sandwich stands, concession stands at race tracks and lunch counters.  Wait a second, this is the 21st century right?  Has any person under thirty ever seen a lunch counter?
The somewhat grey, or to keep with the proper English gray, area comes along with “hospital, grocery store, convenience store, supermarket or office building where food or drink is obtained or consumed.” This is subject when the food or beverage is “prepared on the premises for immediate consumption either on the premises or elsewhere.”

This second clause became obvious to me on two separate occasions over lunch.  Both occurred at the Peony Park Hy-Vee.  The first time I had gotten fried chicken with a Tyson tag on it that was pre-prepared to take and microwave, according to the directions.  The second was a chicken Caesar wrap with a Di Lusso Deli Company label.   
Each experience led to the same conversation with the cashier. It went something like this.  “Wait, there’s the restaurant tax on this?” “Yeah.” “Was this even made here?” “I don’t know.  Do you want to talk to a manager?”  
It’s not worth the hassle or the time to create a scene over a few cents, but it created a quandary of where the line is crossed. Will I end up paying a tax for getting a frozen pizza, because it’s pre-prepared? Or how about all those kids going to school with a Lunchable, will their parents be held responsible for not taking the few minutes to make a sandwich, wrap it in plastic wrap and stick it into a brown bag?
This “specialty” tax has been beneficial for the City of Omaha’s budget, that is not in question, but this is a slippery slope that has opened the door for the blatant denial of the inalienable rights of the citizens of this great city, and country in fact.

The first area that deserves heavy scrutiny is the fact the under the Nebraska State Constitution the maximum level increase on a sales tax is 2 percent.  A sales tax is defined under this document to be a tax that is paid by the consumer of a product or goods, rather than the provider.

Even after a special legislative review this tax was declared constitutional by the State Senate, because it is a “specialty” tax, commonly referred to as a “sin” tax.  So I guess it was acceptable to the members of the Nebraska Legislator that all of us “sinners” that enjoy having a top-notch chef prepare us an amazing meal, or chose to imbibe alcohol outside of our homes should be held accountable for our deeds.  
The sad thing is we pay the same tax regardless of the standards of service.  The 2.5 percent is there whether or not the meal was great, adequate or not fit for serving to our pets.

The second area that should have every American Citizen fond of their rights screaming from the street corners and leading rallies is the unashamed disregard for the fact of how the tax is calculated. On a $100 dollar bill, the 2.5 percent tax is calculated creating a $102.5 tab.  Then the City of Omaha Sales tax of 7 percent is calculated off of this amount, leaving the grand total of $109.68.

This is double taxation as the sales tax is run after the restaurant tax. Sure it’s only an additional 18 cents for every $100, but doesn’t the Constitution set forth by the Federal Government speak rather clearly about this?
If you question the validity of these numbers, I challenge you to go out and run a perfect $100 tab.  You’ll see that you have been over-taxed by 18 cents. And though it isn’t much, since the implementation of the tax I am sure that I have been over-taxed enough to make a quantifiable request.  
This diligent citizen will be heading to the nearest establishment to demand my repayment of over-taxation.  I’ll simply sit down and enlighten the bar keep that I am owed a pint, and to put it on the City of Omaha’s tab.  On second thought, I think I’ll ask for two.

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