WA state’s proposed retail delivery tax is a bad idea for Tri-Cities restaurants| Opinion

It’s time to have an honest conversation about restaurants in Washington right now.

To put it bluntly, we are drowning in a sea of policies with disastrous outcomes. Frankly, I’m not sure which is more concerning: the fact that restaurants are barely squeaking by, or the fact that no one seems to be listening. In the face of rising costs, the state is now considering adding a flat tax on all delivery services. With the costs of food, labor, and now delivery all on the rise, I don’t see how businesses like mine can expect to stay afloat.

New data from the Washington Hospitality Association shows just how precarious life is for restaurants right now: the average profit margin for a restaurant in Washington was just 1.5% in 2023, compared to 4% nationally. The cumulative impacts of policies designed to increase worker pay are, in fact, having the opposite effect.

As the owner of CG Public House in Kennewick, I can tell you firsthand owning a restaurant is a daily struggle. During COVID, things were challenging, but we got creative and worked through it with the help of app-based delivery services. Almost five years later, the restaurant community is still reeling. The cost of food, and the cost of employing people to make and serve food, continues to skyrocket. Keeping costs down for customers is a real challenge.

It’s not just here in the Tri-Cities. My hospitality colleagues in other parts of the state are facing similar challenges, especially for restaurants. Seattle’s delivery pay ordinance has devastated the delivery scene there, especially for small, family-owned restaurants, driving costs up and orders down. Seattle diners now either skip the delivery option or find other places to eat outside the city limits. It’s just too expensive in Seattle, and restaurants, small businesses and app-based workers are paying the price.

And now, the Washington State Legislature is looking at a new statewide cost increase for consumers. In June, the Washington State Joint Transportation Committee unveiled a proposal to add a statewide delivery tax. This cost would be added to anything delivered to your home or office. From Amazon and FedEx to the grocery store and my own restaurant, the state estimates a new fee of 30 cents per order could generate between $45 and $112 million in revenue in 2026, growing to between $59 and $160 million by 2030.

If enacted, Washington would be the third state in the country to add a harmful retail delivery charge, following bad policy from Colorado and Minnesota. As a Tri-City restaurant owner and supporter of this amazing industry, I am sounding the alarm in the hopes our leaders will finally hear us. We are the source of first jobs for many people in our community, including teens and immigrants, students and single parents working to earn extra income. We can’t hire people if our doors aren’t open for business.

Lawmakers need to talk with their local restaurants, prepared food delivery, prepared meal services and small businesses before adding another tax, fee or policy on our industry.

Mark Harmsworth, director of the Small Business Center for the Washington Policy Center, says it best: “The delivery fee is effectively a backdoor increase in the state sales tax. The result will be higher consumer prices, higher taxes and potentially the loss of free delivery services if prices cannot be increased to cover the additional cost,” he writes.

Restaurants, often the heartbeat of local economies, are struggling, and state and local officials continue to hand us anchors, rather than life rings. Food is expensive. Gas is expensive. Customers are also directly impacted by the cumulative effect of these costs on their own household budgets. A new statewide delivery tax or fee, on top of all of Seattle’s other existing taxes and policies, might be the final blow to many already- struggling small businesses.