Vienna Sees Better Than Expected Meals Tax Revenue

Despite anticipation of a steep drop off due to the COVID-19 pandemic, the Town of Vienna has managed higher revenue on its meals tax than expected.

The meals tax generated 80% revenue for the first month of the new fiscal year, July, compared to last year. During pre-pandemic months, the monthly average for meals tax was $250,000, while July’s revenue came in at $194,000.

While there have been concerns for lower meals tax through the upcoming colder months, the generated revenue has left the town “pleasantly surprised,” according to finance director Marion Serfass. In preparation for a steeper drop off, the town budgeted for 50% of the pre-pandemic revenue.

Since March, five restaurants in the town have either moved or closed, while only one has reopened.

A contributing factor for the steady meals tax has been the stable business for drive-thru and high-end restaurants. During the pandemic months, there has been “no noticeable” drop off for drive-thru restaurants compared to previous meals tax revenue. The assumption for the trend is that people feel safer utilizing drive-thru restaurants, according to Serfass.

The meals tax revenue — a 3% tax on each meal sold — is used to pay back bonds issued for capital improvement projects.

Though the revenue has been higher than expected and the town is gradually recovering from the effects of the pandemic, there are still concerns about how local businesses may be affected by the pandemic if it stretches into next year.

In a discussion on Tuesday with Vienna Mayor Linda Colbert, and various business and economic leaders, Town Economic Development Manager Natalie Monkou cautioned that businesses might need to adjust to the ongoing health crisis.

“We’re anticipating the health crisis to continue into 2021 and we want to be able to help our business community pivot,” Monkou said.

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