Tax and Tip

Civitas, a consultant to the city, estimates about 50 restaurants in Carmel generate about $83 million a year.

Carmel’s restaurants get lots of worldwide attention – Condé Nast Traveler named it one of the top 20 food destinations in America – but despite the positive press, there’s a lingering feeling among restaurant owners that the word hasn’t spread to foodies far and wide enough to keep tables filled, especially mid-week and in the off-season.

Taking a tip from Carmel’s hotel owners who formed a hotel improvement district a decade ago to collect 1 percent from guests’ bills for marketing, restaurateurs are considering a similar strategy.

It’s possible that by later this year diners could see an additional quarter – to a half-percent added to bills at full-service restaurants, as part of a restaurant business improvement district, or RBID. With Carmel’s sales tax at 8.75 percent, a quarter-percent would boost the percentage on restaurant checks to 9 percent.

A consultant from the company Civitas told City Council on Feb. 6 that a quarter-percent could mean $200,000 annually. The money would be collected by the city, which would then funnel it to a nonprofit marketing group – possibly Visit Carmel, which already operates the hotel improvement district with $120,000 annually.

“We want to make sure it’s favorable to the customer and not an imposition,” says Ken Spilfogel, owner of Flaherty’s Seafood Grill and Village Corner. “We’re sensitive to the 9 percent.”

The council voted to work with Civitas to help owners legally organize the RBID. More than 50 percent would have to sign a petition stating they agree to assess themselves, and the district could start operating by Oct. 1.

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