SB 1425 (Dunnavant), as reported by the Senate Finance Committee on January 16, would provide that a food truck would only be subject to license taxes in the locality in which it is registered and where its owner pays personal property taxes on the truck. Other localities in which the food truck conducted business would be barred from requiring the business to apply for a business license and from collecting the license fee to which the truck would otherwise be subject (itinerant businesses like food trucks pay a “peddler’s license” tax, which is capped at $500 annually).
The patron’s intention is to assist small businesses, particularly start-ups operating with small profit margins, but as introduced, the bill is broadly drafted and applies to food truck businesses of all sizes. When the bill was heard in committee, VACo and VML objected in particular to the restrictions on requiring food truck businesses to register in the other localities in which they operate; without registering for a business license, apportioning sales and meals tax collections will be extremely difficult. VACo also pointed out that allowing food trucks to avoid paying license taxes in localities where they operate outside of their “home” jurisdictions places those localities’ restaurants, who are subject to local license taxes, at a competitive disadvantage. Committee members asked the patron to work with local governments to address concerns as the bill moved forward. VACo and VML have offered some suggestions for ways to narrow the bill’s scope and to preserve the requirement that food trucks register with all localities in which they do business.
VACo Contact: Katie Boyle