LEOMINSTER >> As was recently done in Fitchburg, Leominster is planning to enact a local option meals excise tax soon in order to help reduce the cost of the Fall Brook Elementary School project and is inviting the public to come learn more about it on Monday.

The proposed tax, which would add 0.75% to the cost of restaurant meals, is expected to generate between $800,000 and $1,400,000 annually, according to estimates from the Massachusetts Department of Revenue. Leominster Mayor Dean Mazzarella is hosting an informational meeting on Monday, March 10 to discuss the local option tax.

Mazzarella emphasized that the revenue generated from the tax would be used to reduce the overall cost of the Fall Brook Elementary School project and to reduce the debt service for the life of its financing, ultimately reducing the burden on Leominster taxpayers.

“The sole purpose of this revenue stream is to support our community’s investment in the Fall Brook Elementary School project,” Mazzarella stated in a letter to the City Council.According to investopedia.com, an excise tax is a specific type of tax that is levied on certain goods or services at the time of their purchase.

Excise taxes are primarily intended for businesses, which are responsible for paying the tax to the government. Typically, businesses incorporate this tax into the price of the product, passing the cost onto the consumer.

According to the Mass.Gov website, Massachusetts, meals taxes are special taxes that apply to purchases of prepared foods for immediate consumption. They do not apply to groceries or other non-prepared foods. The proposed local meals excise would be imposed in addition to the 6.25% state sales tax on meals, bringing the effective tax rate on sales of meals to 7% in Leominster.

To adopt the local option meals excise, the City Council must approve it by a majority vote. The city or town clerk must then notify the Department of Revenue (DOR) within 48 hours of the acceptance. DOR will collect the additional tax at the same time it collects the state tax on the sale of restaurant meals.

Leominster City Council member David R. Cormier noted that the tax is necessary to help fund local projects, including the construction of a new school.

“This tax will provide a vital revenue stream for our community, enabling us to support important initiatives like the Fall Brook Elementary School project,” Cormier said.

The city of Fitchburg recently passed a similar meals excise tax, with its city council approving the measure by a 7-4 vote on March 4.

Monday’s meeting will provide an opportunity for residents to learn more about the proposed tax and its potential impact on the community. For more information, please contact Mayor Dean Mazzarella’s office at (978) 534-7500.