Civil Discourse Now

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Food trucks have an unfair advantage over restaurants that pay property taxes.

   About a month ago a Broad Ripple business person told me the outrageous amount she had to pay in property tax.

   Taxes are necessary for our society to function. Some people and non-people get passes on that particular tax.

   Yesterday I saw an item posted about Indy’s food trucks. These are not restaurants on wheels. A restaurant provides its patrons with a table and chairs at which those patrons may enjoy the meal provided. Food trucks are delivery vans made over to serve food out of a kitchen in what had been the cargo area of the van. Food is served out of a side opening.

   This sounds like a great idea. But what about local restaurants with whom the food trucks compete? The owners of those restaurants pay property taxes. They also provide seats, tables, and restrooms for their patrons. If I owned a restaurant and saw a food truck pull up outside my establishment, I would be upset.

   The lingo to describe this cultural development has a familiar ring. In a couple of articles I have read, food trucks are compared to brick-and-mortar or brick-and board stores. Those are the same distinctions that were made when Amazon and other on-line vendors began to drive out of business physical stores. Amazon has contributed to Indiana’s economy, in a way. If you will remember, several months ago, Kentucky refused to give Amazon a "pass" on sales and use taxes for distribution centers Amazon had located in the Bluegrass State. Governor Daniels was not shy. He was able to entice Amazon over the Ohio River and Indiana picked up approximately 1,500 jobs that paid a bit over minimum wage and offered no benefits. In the meantime, we have lost, according to a Butler University study, about half-a-billion dollars in sales and use taxes through such arrangements. That half-billion dollars is nothing. Accounting errors of that magnitude happen all the time here.

   I will not (unless I have little or no choice, i.e., no other lanes are open or I am in a hurry because of an emergency) use the automatic lane in a grocery store. For different reasons I shall not frequent a food truck. The City-County Council (now here I am in dreamland) should impose some sort of tax on the food trucks. They have an unfair advantage over the store owners.

   Besides, where will the City get the money to pay for the next year of Pacers subsidies?

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Comment by Bill Thompson on June 28, 2012 at 11:13am

Mark hits a hot-button-issue of mine.  I disagree "somewhat" about property taxes being regressive, because of the homestead credit. But property taxes were made a ton more regressive by Indiana putting a 1% cap on owner-occupied, and a 2% cap on rentals. The higher tax rate on rental properties is simply passed to the renter, most of whom are less well off than homeowners.

As Kin Hubbard said, "it ain't a crime to be poor, but it might as well be."

Comment by Mark Small on June 28, 2012 at 5:13am

Nic, I believe property taxes are regressive and a bad source of revenue. However, unless the revenues they generate are replaced, there still are the needs of paying for fire protection, schools, police, etc.

Comment by Bill Thompson on June 27, 2012 at 5:54pm

Paul - you may be right, I hadn't stopped to consider it.  Property tax on a business and its equipment is 3% under the new rules.  A quick trip to the BMV registration estimator shows you're right, annual excise taxes are nowhere near 3% of a value of, say, a 6-year old food truck.

I still don't get the idea of food trucks, vis-a-vis health inspections.

Comment by Paul K. Ogden on June 27, 2012 at 5:39pm

Excise taxes paid on a vehicle are a tiny fraction of the property taxes a business pays.

Comment by Bill Thompson on June 27, 2012 at 1:27pm

I see some unfairness, in the truck sniping customers.  However, the truck owner does pay the equivalent of property taxes - that's what excise taxes are for.

Broad Ripple business owners may hate their property tax bills, but they haven't minded the rapid runup in real estate values over the past 30 years I bet.

One problem with food trucks is ya can't look up the health department inspection info (www.mchd.com) for a truck.  At minimum it would be difficult, one would have to get the ID# or license plate of the truck.

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