Food Trucks Scream for Ice Cream Reg Changes

Food trucks have unprecedented commercial real estate opportunities now, essentially turning them into tenants in some scenarios. That’s because for some property owners, the presence of these next-generation food trucks at their shopping centers can satisfy a need for diversified food options at a property or otherwise enliven a project. (Although, for others, food trucks may not fit within the tenor of the development, may conflict with a project’s leasing plan, or may otherwise present too many regulatory hurdles for the property owner. See “The Truck Stops Here—Or Should It?” in the February Insider, available here.) But many local jurisdictions are scrambling to look into either adopting new laws to govern the operation of mobile food trucks or updating existing laws that were previously implemented to govern ice cream trucks or other specific types of food trucks.

In Washington, D.C., food truck owners will soon operate under an improved tax system. While that’s a welcome development, they’re still waiting for the city to approve additional changes to long-standing regulations. They assert that those regulations were meant to apply to old-fashioned ice cream trucks—and that they make the process of operating a food truck unnecessarily complicated.

Starting next month, mobile food vendors will charge and file the same 10 percent sales tax as their brick-and-mortar counterparts. (Currently, licensed vendors on every truck pay a quarterly tax on their permits instead of charging sales tax. That was problematic because the number of licensed vendors per food truck varied, and so did the tax burden of each truck.)

While the new tax rule is helpful, there are many more regulations—some of them almost 40 years old—that should be replaced with alternatives. The rules that were meant for ice cream trucks need to be updated to meet the needs of food trucks, say vendors. Under current laws, for instance, food truck operators are prohibited from pulling over to serve food unless they are “hailed” or flagged down by customers. They’re also required to start driving as soon as customers aren’t in line in front of their truck. Vendors say it’s not easy to shut down cooking equipment quickly. The requirement that every truck must have at least one licensed vendor on board in order to serve food—a rule that’s meant to ensure safety standards—is also onerous; if the only person who purchased a permit is out sick, the truck can’t operate.

The D.C. Department of Consumer and Regulatory Affairs proposed a package of new regulations earlier this year, several of which would address those concerns. The proposals are now undergoing the final stages of approval with the city government. Opposition to the updated regulations has come from restaurant owners that are concerned about increased competition from food trucks setting up shop nearby under new, relaxed regulations.