Steven Latimer

ARAMARK holds the contract with VCU Dining Services for anything food related on campus. That's all fine and dandy, however it appears that in their pamphlet titled "2008 VCU Summer Dining Plans," VCU Dining Services made a small mistake.

According to Martha Harper of VCU's Off-Campus Student Services, in Virginia, food purchases via meal plan made by students enrolled in public universites are, by state law, tax-free.

This means VCU students who buy items from ARAMARK using their meal plans' Dining Dollars do not have to pay Richmond's hefty 11% meal tax.

The pamphlet reads that:

Purchases with VCU Dining Dollars have a tax advantage of an 11% savings on each VCU Dining Services purchase.

To the casual observer, this would seem correct, however mathematically this claim is untrue!

Not having to pay an 11% tax is not the same thing as saving 11 percent.

Suppose that an item normally subject to the 11% meals tax (say, a hot dog) costs c dollars. Then you would pay c + .11c = 1.11c dollars for it at a place like 7-Eleven. This hot dog, when sales tax is not applicable (i.e., when bought on campus using a meal plan), costs only c dollars. When an 11% savings is applied to the item now costing 1.11c the new cost is 1.11c(1-.11) = .9879c which is not equal to c.

In fact, VCU Dining Dollars only have a tax advantage of approximately 9.91% since (.11c)/(1.11c) = 9.9099099 percent.

Heh.