The town’s loudest complaints against Tech have related to the meals taxes that Tech does not collect for its on-campus dining facilities.
“It won’t go away,” said Mayor Ron Rordam. “I think we need to have a serious discussion and we’re starting that discussion. You’ve got to admire the university. They’ve done a very good job building an environment that students want to be in as far as where to eat, how to eat.”
Blacksburg restaurants collect a six percent meals tax on all sales. The university is not required to collect the taxes because it is an arm of the state government.
Rordam said Tech’s multiple brand name food locations on campus give students exciting options that are owned by the university.
“They’ve done it in a unique way, which is the university owns the franchises and runs the franchises,” Rordam said. “Because of that, they’re not subject at all to meals tax and I think there are downtown restaurants that have felt the impact of that.”
He said downtown restaurants are offering options unavailable on campus, but they need to work to pull students off campus.
“It’s not just the 6 percent difference,” Rordam said. “It’s just the choices that are offered. I think we’ve got to work with restaurants, too — to help them be competitive, and how do you attract students downtown?”
Local government scholar Karen Hult said the university is unlikely to make any changes in its current economic situation but could be persuaded to pay the taxes as a good faith gesture once the economy recovers.
Town officials plan to continue discussions with the university but emphasize that student plans would not be taxed. The town does not have the ability to impose any taxes on the university.
“I think we have to be proactive and continue that discussion,” Rordam said. “There is absolutely no discussion about trying to impose a meals tax on student plans or student purchases on campus.”
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Collecting the meals tax would not cost the university anything, so the argument that the university cannot pay it because of the economic climate does not stand. In fact, the Town of Blacksburg returns 3 percent of the meals tax collected, meaning that the university would financially benefit from collecting the tax. Student meal plans would not be affected by the change. This is a fairness issue. Other colleges and universities in Virginia collect local government meals taxes, but Virginia Tech doesn't.
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The point is not that the university would somehow be paid by the university. They could be hurt by losing a competitive advantage over places in town that must charge tax.
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I think it's more expensive to eat on campus anyway. I work here (I'm not a student) and for a bit more than the price of a piece of thin pizza at Sbarro, I can get a nice-sized pita pizza at The Cellar. Of course, I have to pay a tip on top of that, but it's OK to get some service...
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I find it amusing that the Town would like to tax the food establishments on campus when so many have gone out of business downtown.
Mayor Rordam states that that the problem is "just the choices that are offered." Perhaps the town should consider making it easier for restaurants in downtown Blacksburg to turn a profit via lower taxes. I'm sure many students would be willing to go to a good restaurant downtown, but no non-chain restaurant owner in their right mind would attempt to operate a business there. There's a reason there are so many empty storefronts downtown. It's virtually impossible to turn a profit!
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