State sales tax increase raises meal plan cost

Emily Carmichael, Print News Editor

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As the year ends, students looking to refill their dwindling WaveBucks will find themselves paying more after Friday, due to a new sales tax policy.

The new state legislation increases the statewide sales tax from 4 percent of each dollar spent to 5 percent, the equivalent of a penny. According to Rob Hailey, senior associate vice president of University Services, the legislation also suspends Tulane’s sales tax waiver until June 30, 2018.

“I think this was the way they could kind of strike at higher ed with the least amount of pain to the rest of the population,” said Director of Dining and Auxiliary Services Lisa Norris. “This was a way to kind of spread the pain out to everybody.”

This sales tax change means that, when the policy goes into effect on Friday, a purchase of $100 of WaveBucks will cost $105 after tax. On July 1, 2016 this tax will decrease to 3 percent.

“The 3 percent rate … is really the important one for our students because you do your meal plan at the beginning of the semester,” Hailey said. “So if you’re a summer school [student] and you’re buying a summer meal plan, you’re paying 5 percent. But next year [when students purchase their meal plans] that goes to 3 percent.”

This tax will only affect purchases of an entire meal plan or additional WaveBucks. Individual swipes for Bruff Commons or food purchased with WaveBucks will not face an upcharge from the tax.

Additionally, the tax is not retroactive. Students will not receive additional charges on the meal plans they purchased in January. Those transactions will remain tax free.

Hailey said Tulane will not receive the proceeds from the new tax. The money made from the additional charge will be remitted to the state.

Michael Goodman, associate vice president of University Financial Aid, said any increase in the cost of attending Tulane next year will be reflected in the financial aid awards offered to qualifying students. 

“The Tulane Financial Aid Office uses an average meal plan cost when setting the financial aid cost of attendance for our undergraduate students,” Goodman said. “If the average meal plan cost for 2016-2017 is higher due to the State of Louisiana assessing a new tax on the purchase of a Tulane meal plan, then our average cost will reflect such an increase.”

Even though Tulane will experience a sales tax increase, the university’s tax is still less than that of Orleans Parish, which is 10 percent after the increase.

“You’ve got to remember that it is still going to be a deal for you to purchase WaveBucks at the end of the day, because starting July 1 it’s only to be 3 percent,” Norris said. “So if you were to purchase $100 in WaveBucks, you’d pay $103. Whereas if you were to make that same purchase with your credit card downstairs, you’d be paying [10 percent].”

Freshman Samantha Reese said she finds the increased prices to be minor, but nonetheless is not thrilled with having to pay more.

“I don’t necessarily think it’s a huge deal, but I don’t necessarily think that it makes sense to tax university students given that probably a vast majority of them aren’t even going to benefit from these taxes because they aren’t residents of the state,” Reese said.

This tax increase comes as the Louisiana legislature scrambles to solve a budget crisis that has threatened integral state programs such as the Taylor Opportunity Program for Students, which supplies scholarships to Louisiana residents attending in-state colleges. The new sales tax will make the Louisiana’s average local sales tax the highest in the nation.