Sit down to a $50 restaurant meal in Spotsylvania or Stafford county and you'll be charged $4.50 in added state and local taxes.
Sit down to that same meal in Fredericksburg, and you'll pay $5.50 in tax.
The $1 difference is because Fredericksburg's meals tax is 2 percent higher than those of its neighbors. The City Council raised the tax this year from 5 percent to 6 percent.
And so far, that has resulted in an increase in revenue for the city.
Stafford and Spotsylvania's meals tax rates are both 4 percent, the highest rate the state allows counties to charge.
Cities and towns don't have a limit. The highest meals tax in the state is the town of Orange's 8 percent.
Local meals taxes are added to restaurant bills on top of the 5 percent state sales tax.
Despite complaints before the change from restaurant owners who said the move would make Fredericksburg eateries less competitive, council members approved the tax increase with business owners in mind.
Since commercial properties didn't see the decrease in assessed value that residential properties did, a proposed 70.5-cent real-estate tax rate was going to hit commercial owners harder than residential owners.
By adding 1 percent to the meals tax, council members were able to hold the real-estate tax rate at 68 cents per $100 of assessed value, which was still a tax increase for many.
The new meals tax took effect Aug. 1, prompting many city restaurateurs to post signs next to their cash registers and doors to remind customers why they might notice a difference in their checks.
According to many restaurant owners and city tax collections for the first two months in which the new rate was effective, the extra 1 percent doesn't raise too many eyebrows.
In the first two tax reporting months that reflect the new 6 percent rate the city brought in $1.4 million in meals tax, just over $200,000 more than the 5 percent tax brought in for those same two months last year.
That total was only $5,700 lower than what the city had projected it would bring in for those two months. And since meals tax collections came in nearly $47,000 above budget projections in July and August, Fredericksburg is on target to bring in the additional $883,000 that the extra 1 percent was supposed to net for fiscal year 2010.
Steve Estes knew about the impending meals tax increase when he was preparing to open Rodango's Steakhouse restaurant in Central Park earlier this fall.
"Location was more important," he said, adding that even though Central Park has taken a hit from competition in Spotsylvania's Cosner's Corner, it's still a desirable place to open a restaurant.
In the three months he has been open, Estes said, "I have not had a single customer say anything about the meals tax."
At Bistro Bethem downtown, server Chris Rule said those who do notice the tax tend to be from out of town.
"Sometimes just after they get the check, they'll inquire just to make sure everything's correct," he said. "But it seems like most of them don't mind, they just want clarification."
But Rebecca Snyder, co-owner of Kybecca wine bar on William Street, said that for a city that wants to be a tourist destination, raising taxes that out-of-towners notice the most is bad for business.
"It helps create the perception that we are expensive, and that's not the right perception to have in this market right now," Snyder said. "It's the very people who we're trying to attract that notice it the most."
Snyder said she's not completely opposed to the meals tax, but she'd prefer to see more of a rationale for when and why it's raised, and she'd like to see new money from the tax go into projects that could improve the downtown or otherwise help restaurants succeed.
Capital Ale House President Matthew Simmons, whose restaurants have to levy a 6 percent tax at their Fredericksburg and Richmond locations, and no local meals tax at locations in Henrico and Chesterfield counties, said the difference doesn't come up very often.
"In no way am I supporting extra sales tax, but people don't say, 'I'm going to drive to the next county for dinner because it's going to be 6 percent less expensive,'" he said.
Simmons said the tax can raise eyebrows when customers get quotes for large events such as banquets, but "I don't think we've ever lost any sales to another restaurant" because of it.
Besides, he said, "How much would it cost in gas to drive an extra 10 miles away?"
Emily Battle: 540/374-5413
Email: ebattle@freelancestar.com