2020 Legislative Agenda

CURRENT BILLS

The Iowa Restaurant Association is closely monitoring the progress of several bills being considered in both the Iowa House and Senate. 

HF 2211

Redefining revenue levels for “Home Bakeries” —The industry has always been supportive of home-based entrepreneurs but is concerned with a proposal modifying the maximum sales from $35K to $250K. Home-based businesses are not required to meet the standards as a retail bakery, but those revenues are approaching many retail operators’ gross sales.

HF 2306

A bill holding a restaurant or bar responsible for violent behavior of people within 1,500 feet of the premises. 1,500 feet is half the length of a football field. This suggests a nuisance be tied to an establishment even if there hasn’t been service rendered or over-service of alcohol. 

Credit Card Fee Reimbursement on Sales Tax

Today more then 80 percent of restaurant and bar sales are completed by credit, debit, or prepaid card. As a result, credit card fees have become one of the largest line items in hospitality establishments. These fees are not waived for sales tax. As a result business owners are paying an increasing amount of money serving as the state and local tax collector. 

  • The average Iowa restaurant/bar pays more than $17,000 per year in credit card fees and $1,200 of that amount are the fees associated with collecting sales tax alone. 
  • 28 states offer retailers a reimbursement for the credit card fees and/or other costs associated with the collection and remittance of sales tax. 
  • These “vendor allowances” are a partial reimbursement for services rendered to the state in recognition that the state would not be able to collect sales tax as efficiently and effectively without retailers serving in this role.

Industry Ask

Create a vendor allowance for the credit card fees associated with collecting sales tax. Border state models can be found in Illinois, Missouri, Nebraska, Wisconsin, South Dakota.

Third Party Delivery Regulation

Today, 63% of restaurant prepared food is consumed outside of the restaurant. This is evidenced by the growth in third party delivery services (eg Doordash, GrubHub, UberEats).  Because the industry is new, we are living in a virtual “wild west” lacking standards and regulation. We are studying the plausibility of requiring: 

  • A contractual relationship between third-party delivery services and restaurants they claim to represent online, with a fine or sanction system.
  • Shared customer data so restaurants know who is enjoying their food.
  • Food-handler training for all delivery people.
  • Equipment in cars to ensure time and temperature control of food. 
  • Rules stating no animals or smoking in the car as well as no intermittent passanger pickups.
  • Liability assurances that if a third-party delivery person is in an accident, the liability is on the driver and/or the third party delivery company and not the restaurant.
  • All drivers pass criminal background checks.

Industry Ask

Seek places to build third party delivery regulation into current Iowa tax, food safety, and liability code to protect Iowa consumers and food service providers.