Minnesota Opinion: C'mon Minnesota, a tax on pizza deliveries?

The unfathomable, what-won’t-they-tax proposed fee on pizza deliveries and other doorstep dropoffs isn’t in the Minnesota Senate bill. But it is still in the House version of the same transportation omnibus measure, and it’s up to a conference committee to now combine the two versions into one final bill.

West Central Tribune graphic

“So who knows what’s going to come out. We’re still very concerned,” Angie Whitcomb, CEO of Hospitality Minnesota, said in an exclusive interview last week with the Duluth News Tribune Editorial Board.

Concerned for good reason. The 75-cent delivery fee, if enacted, promises to be especially burdensome on elderly, handicapped, and lower-income Minnesotans who rely on deliveries because it’s harder for them to get out. Small businesses — especially in the hospitality industry, which was perhaps hit hardest of all by the pandemic’s shutdowns — will feel this, too, figuring out how to administer and charge the fee and how to explain it to angry customers.

“Guests may think the mandatory delivery fee that’s required to be listed on their bill will go to the driver or back to our company, when it doesn’t. If they reduce their tip, or don’t tip at all, delivery drivers will experience reduced take-home pay,” Pizza Luce CEO JJ Haywood wrote in an April 21 commentary in the News Tribune. “It's regressive because the fee doesn’t flex with the value of the delivered item. How is it fair that the delivery fee on a $3,000 couch in a 10-ton truck would be the same as on an $11 meal delivered in a compact sedan? How is it equitable that 75 cents on a $25 order (nearly half of our deliveries) would add 3% to the final cost compared to just 0.025% on that $3,000 couch? This proposal to legislate a delivery fee is confusing for both businesses and our patrons.”

It’s no wonder an unlikely coalition that includes Hospitality Minnesota, faith leaders, small-business owners, the Minnesota Grocers Association, the Minnesota Retailers Association, the Minnesota Licensed Beverage Association, the Minnesota Chamber of Commerce, and others banded together this legislative session to oppose the new fee.

“We had a cohort of people that you don’t often see come together on an issue, and I think that speaks volumes,” Whitcomb said.

Their No Delivery Tax Coalition rallied at the Capitol Friday, urging lawmakers to be reasonable.

“One of my concerns … is that this tax would be onerous and on the backs of the most vulnerable communities,” Brooklyn Park Mayor Hollies Winston said at the rally and press conference, his comments and others provided to the Duluth News Tribune Opinion page. “There are a ton of people saying that this is just a 75-cent tax; the reality is that many of those businesses will have to build out backend operations and staff to track this tax.”

“Our customers shouldn’t be taxed for using our free delivery service because they only have a short break with convenient delivery solutions,” said Mari Harries of River City Eatery in Windom, Minnesota, which launched a delivery service when restaurants were ordered closed in 2020. “We love rising to the needs of our community as a small business and we can’t do that with a tax like this that would hinder our growth.”

Maybe 75 cents isn’t all that much to most of us (though certainly not all of us), especially if it helps raise revenue to fix highways and bridges and to fund other transportation needs. But, as Whitcomb said, “That’s not really the point.” The state has a record, nearly $20 billion budget surplus. It’s the result of Minnesotans clearly being overtaxed already. For the Legislature to be asking for more, now, is unfathomable. And wrongheaded.

Especially when it’s a tax that’s regressive and poses an undue burden on the most vulnerable residents of our state and on businesses already struggling.

Conference committee members need to reject it when preparing the final transportation omnibus bill.