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NYC Adds Dining Out Tax in an Effort to Help Restaurants

Small business restaurants have been particularly hard hit by COVID’s lockdown measures. In NYC, a COVID hotspot, restaurants have only recently reopened to limited capacity. As the weather cools and outdoor dining becomes more difficult, restaurants face continued revenue obstacles. According to Food & Wine, the city aims to combat this economic hardship by allowing…

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Small business restaurants have been particularly hard hit by COVID’s lockdown measures. In NYC, a COVID hotspot, restaurants have only recently reopened to limited capacity. As the weather cools and outdoor dining becomes more difficult, restaurants face continued revenue obstacles. According to Food & Wine, the city aims to combat this economic hardship by allowing restaurants, excluding chains and food trucks, to enact a temporary 10% surcharge.

On this Business Casual segment, Daniel Litwin and Tyler Kern consider the cost this tax passes on to the consumer. At least some customer dissatisfaction is inevitable, so who will take the brunt of it; employees or owners? Litwin and Kern brainstorm ways to increase revenue without increasing prices.

KEY POINTS:

  • In mid-July, Yelp data showed close to 16,000 restaurants nationwide closed permanently due to the pandemic.
  • NYC approves restaurant tax to help struggling dining establishments mid-COVID.
  • Restaurant customers in NYC face up to a 10% surcharge on bills.

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