Bill
H 3774
The bill imposes a per-order delivery fee on third-party platforms and splits the revenue—half to municipalities for transportation needs, half to the state transportation fund.
Overview
- Bill: H 3774 (House Docket No. 4004), titled “An Act relative to third party delivery fees.”
- Introduced: February 27, 2025.
- Status: Referred to the Transportation Committee; hearings scheduled for Oct 14, 2025 (hearing rescheduled from earlier date). The hearing location was changed to include a virtual option.
- Relationship: Related bill noted as HD 4004 (replaces; cross-reference in materials).
Purpose and intent
- The bill establishes a framework to regulate third-party delivery service fees charged to customers for online food and beverage orders, and to dedicate a portion of fee revenue to transportation infrastructure and related municipal needs.
Key provisions and changes (definitions and new rule)
- Adds definitions to Mass. General Laws Chapter 159B:
- “Covered establishment”: a restaurant or other food/drink establishment that offers same-day delivery or pickup via a third-party platform in a single transaction.
- “Customer”: an individual placing an online order through a third-party platform.
- “Delivery-assessments”: the fee paid by the customer to the third-party delivery service.
- “Online order”: an order placed via a third-party platform for pickup or delivery in the Commonwealth.
- “Purchase price”: the menu price offered on the platform by the covered establishment; excludes taxes, gratuities, or other fees.
- “Third-party delivery service company”: an entity that facilitates same-day delivery/pickup for 20+ covered establishments in Massachusetts.
- “Department”: the Department of Public Utilities (DPU).
Section 23: Delivery fees, reporting, and distributions
- Annual reporting (by Feb 1 each year): Each third-party delivery service must report to the director (DPU) the number of deliveries originating in each city/town for the prior year and the amount collected from delivery-assessments.
- Delivery assessment (fee): A minimum delivery assessment of $0.50 per order applied to orders from covered establishments. The assessment does not apply to items not subject to state sales tax.
- Inflation adjustment: The department may adjust the delivery assessment at least every two years based on inflation.
- Revenue distribution: The funds collected are split:
- Half (1/2) distributed to municipalities (cities/towns) based on the number of rides originating there, to address transportation infrastructure and related programs (e.g., complete streets programs, alternative transportation).
- If a municipality’s distribution is $25,000 or less, the chief executive officer may expend the funds for these purposes without further appropriation.
- The other half (1/2) distributed to the Commonwealth Transportation Fund (CTF).
- Purpose of distributions: To address the impact of transportation network services on municipal roads, bridges, and other transportation infrastructure, and to support related programs and public transportation initiatives.
Who is affected
- Third-party delivery service companies (requirements to report, minimum per-order fee, potential inflation-based adjustments).
- Covered establishments (restaurants and similar venues offering same-day delivery via third-party platforms).
- Customers (new per-order delivery assessment).
- Municipalities (receive funding allocations based on delivery originations).
- Commonwealth Transportation Fund (receives half of the collected funds).
Procedural and timeline aspects
- Reporting deadline: February 1 each year.
- Fee adjustment: No less than every two years, based on inflation.
- Revenue distribution: Proportions specified (1/2 to municipalities, 1/2 to CTF), with specific spending discretion for smaller municipal allocations.
- Hearing schedule: Initially set for Oct 14, 2025 (1:00 PM–5:00 PM), with a location change to include a virtual option.
- Legislative path: Referred to the Transportation Committee; Senate concurrence noted in materials.
Notes
- The bill focuses on consumer-facing fees from third-party platforms and ties revenue to transportation infrastructure funding at both municipal and state levels.
- It does not specify tax treatment beyond noting avoidance of items not subject to state sales tax from the delivery-assessment application.
Compiled from official sources — confirm details with the bill’s official record.
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