Lawmakers in Omaha, Nebraska are debating an ordinance expanding the city’s business tax on restaurants to food trucks and other mobile vendors.
On August, 5 members of the 7-member Omaha City Council voted to delay deciding on a proposed ordinance expanding the city’s occupation tax on restaurants and caterers to include food trucks. The tax, enacted in 2010 to help pay for public pension liabilities, is a 2.5 percent excise tax, added to the price of food and drinks purchased by individuals and state sales taxes.
The proposed ordinance also restricts where food truck vendors may serve customers, prohibiting food vendors from parking in parking lots or in government-owned parking spaces.
Doug Kagan, president of Nebraska Taxpayers for Freedom, says the new regulations are the most burdensome element of the law.
“The tax itself won’t hurt the food trucks’ competitiveness at all,” Kagan explained. “They might just raise their prices a few cents. When you talk about the regulations, that’s where it gets sticky, because if they pass regulations to prohibit the food trucks from parking in front of parking meters or in parking lots or in public right-of-ways, then it could get very controversial.”
Piling on Regulations
Adam Weinberg, communications and outreach director with the Platte Institute for Economic Research, says local lawmakers across Nebraska are leaving foodies and entrepreneurs with a bad taste in their mouths.
“From a free-market perspective, the most concerning thing in the food truck scene in Nebraska, in Omaha, and in many other cities where food truck scenes are forming, is really not as much on taxation, but more on regulation,” Weinberg said. “The main issue food truck operators in our state have run into, particularly in some of our larger cities like Lincoln, are parking regulations that essentially make it impossible for them to compete with brick-and-mortar restaurants.”
Weinberg says Omaha lawmakers should look to Lincoln as an example of how not to handle food truck regulation.
“In the City of Lincoln, right now there are really only a handful of successful food truck enterprises, because they’re not allowed to park in public parking, like food trucks are in many other major cities, so they have to have somebody to provide private parking for them and basically sponsor them and allow them to operate there,” Weinberg said. “Of course, that’s to protect existing restaurants, which is against competition and against entrepreneurship, and we think it’s something that needs to change to open the marketplace in Nebraska.”