Even with the lockdown, thus far, it appears that COVID-19 hasn’t ravaged Warsaw’s meal tax, which may be a positive indicator for standing of the town’s businesses.
Warsaw collects meals tax on prepared food from major chains including Hardee’s and Food Lion to small non-chain businesses, such as Michelle’s Bakery and Bubba B’s Ice Cream. And according to the town manager, Joseph Quesenberry, revenues have held up, and in some cases, improved.
A prime example is McDonald’s, which saw its meal tax rise 8 percent from February to March. McDonald’s is a major contributor to Warsaw’s meals tax, accounting for 25 to 35 percent.
“If they’re hurting, our meals tax revenue is going to be hurting but when they’re doing okay we can withstand some weakness from the smaller businesses,” said Quesenberry.
But so even the local businesses appear to be holding their ground. “A couple of businesses have slightly decreased, but everyone has stayed pretty solid,” he said.
The town invested nearly $25,000 in its food relief program, which went to buying food from local restaurants to provide free meals to town residents, and Warsaw didn’t charge meals tax on those purchases.
“So hopefully if any restaurants did have a slight dip in their numbers, if you factor in our infusion of funds, they might have stayed just about the same, if not a slight increase,” said Quesenberry.
Another positive indicator is meals tax payments. In April, Warsaw town council waived the late fees on meals tax until Virginia lifts it coronavirus-related restrictions on restaurants. But so far, the town hasn’t found businesses needing to take advantage of that offer. Businesses have been paying on time.
The town is pleased with how circumstances appear to be panning out. “We don’t want to see anyone go under or hurt during this time,” said Quesenberry.