Cashing in on the Oyster Festival

Town government seeks way to better capture meals tax money

Each November, the Urbanna Oyster Festival attracts thousands of people who spend oodles of money. Yet Urbanna’s town government reportedly receives “very little” income from the festival. That’s according to Urbanna Town Councilor Alana Courtney, who made the statement Aug. 22 at the council’s regular semimonthly meeting.

“We have one of the biggest engines of economic development that any municipality probably anywhere has and that’s the Urbanna Oyster Festival, and we don’t really make any money from it, and I just think that’s really a shame,” Courtney said.

In 2023 the Urbanna Oyster Festival income to the town was about $20,600, according to the budget. Of that total, $12,900 came from meals taxes collected by festival food and drink vendors; and $7,700 came from boat slip rent at the Urbanna Town Marina.

The town’s meals tax is 5%. So $12,900 in festival meals tax income means the total food and beverage sales were just $260,000.

Festival meals tax is paid by the honor system. The town does not monitor food sales.
The town does not require charities, civic organizations and nonprofit organizations to collect meals tax.

Limited revenue sources

Former multiple time Urbanna Oyster Festival Chairman Joe Heyman was at the Aug. 22 meeting. He told council that since the festival is offered on public streets, people can’t be charged an entrance fee to walk on town streets.

Heyman went on to explain that one way the festival can charge is for parking, which is $20. The money is “traditionally” split between some landowners and the Urbanna Oyster Festival Foundation on a voluntary basis. Some landowners who park cars do not contribute to the foundation, others contribute a percentage, said Heyman. “We really don’t have a whole lot of enforcement on that. We don’t have the ability to do it.”

Probably three years ago some landowners would donate back part of the parking revenue, and now they are not. “Which is understandable, I mean you have costs and taxes or whatever else, so they’re looking to get compensated,” Heyman said.

“The parking monies haven’t grown enough to keep up with our budget, so that’s why you see us (the foundation) doing all these other things we’re doing to try to generate revenues.”

To earn more income, a few years ago, the foundation started the VIP Experience, which sells just 250 tickets each day of the festival, and they sell out quickly, he said.

Honor system

Meals tax money goes to the town.
Courtney asked, “Do you think it’s truthfully reported?”
Heyman quickly answered, “No, it’s not.”

Heyman said that the foundation board is considering eliminating food vendors that under report their sales. The idea is to find the “least successful” vendor based on meals tax reported and replace them with a vendor that can do better. “Once that happens that will change the dynamic pretty quickly,” said Heyman. “So we’ve talked about that and we’re going to implement it…”