Americans for Tax Reform testifies that delivery tax will hurt Minnesota’s small businesses and struggling families

Yesterday, Americans for Tax Reform submitted official testimony to the state Senate Taxes Committee regarding SF 3157, the Omnibus Transportation appropriations bill, specifically in opposition to the proposed 75-cent delivery tax that would apply to every retail order delivered in Minnesota. Their testimony is reproduced below:

Dear Senator,

On behalf of Americans for Tax Reform, and our supporters across Minnesota, I
urge you to reject the 75-cent-per-order retail delivery tax that will damage
Minnesota’s economy and hurt families. This proposal, outlined in Sec. 5
[168E.03] of SF 3157, will hurt Minnesota’s small businesses and leave seniors,
people with disabilities, and many of the state’s poorest communities without
access to food and grocery delivery. The 75-cent delivery tax is regressive,
unnecessary, and will cause significant damage to Minnesota’s economy. It is
imperative this proposal does not become law.

Minnesota has an $18 billion budget surplus. There is absolutely no reason to
institute a tax, particularly one as regressive as the 75-cent delivery tax. While
Minnesota may be enjoying a surplus of funds, many families and individuals
across the state are struggling mightily with inflation and the rising cost of living.
This proposal will impact these people the most. Over the course of a year,
families may end up paying hundreds of dollars in taxes for delivery of food,
groceries, and other goods. According to the Consumer Price Index, food-at-home
prices have risen 13% year-over-year while food away from home prices have risen
8.5%. The food delivery tax in SF 3157 will further exacerbate the economic strain
felt by millions across the state. Between 2021 and 2022, food insecurity rates
increased sharply, particularly among families of color. This only further reinforces
the impact that rising inflation is having on American families, particularly within
historically disadvantaged communities.

Food delivery services have become essential to the survival of many small
businesses who cannot afford to hire employees to only deliver food. Through
delivery apps, these small, family-owned restaurants can diversify their customer
base and increase revenue, energizing their local economy. Imposing a 75-cent
delivery tax on all orders will drive down demand, at high cost to thousands of
small Minnesota businesses. With lower revenue, these restaurants, many of which
operate on razor-thin margins and are dealing with increasing supply costs, will be
forced to cut jobs. This tax will also impact Minnesotans who earn income from
delivering on these apps. These people enjoy flexible hours and competitive wages,
undoubtedly strengthening the state’s economy. They would lose out on income
resulting in lower demand for delivery services. The total economic cost of this
proposal would be devastating for countless small businesses and families across
Minnesota.

Instituting a delivery tax also raises concerns regarding accessibility. Seniors and
people with disabilities are among those who rely on delivery services for food,
groceries, and other deliveries. This tax will unfairly reduce their access, as well as
the access of those in remote parts of the state, to this essential service.

It is crucial that all Minnesotans continue to have access to food delivery apps,
without unnecessary taxes that will hurt businesses, families, and the state’s
economy. Seniors and people with disabilities rely on delivery services for food,
groceries, and other goods. Many low-income families, who are already feeling the
cost of skyrocketing inflation, could be priced out of delivery services if this fee is
passed. As such, I strongly urge you to reject the delivery tax laid out in Sec. 5
[168E.03] of SF 3157.

Sincerely,
Grover Norquist,
President
Americans for Tax Reform