WM A&P wants auditing powers

WM A&P wants auditing powers

City wants to ensure Hamburger Taxes are being paid

news@theeveningtimes.com

Where’s the beef?

The West Memphis Advertising & Promotion Commission collects a one-percent tax on prepared food and hotel rooms, commonly referred to as a “Hamburger Tax.” The A& P commission uses the revenue collected to further promote tourism in the City.

Historically, West Memphis’ hamburger tax collection has been done on the “honor system.” But during the October A& P Commission meeting, commissioners recommended an updated ordinance be sent to the City Council to put some teeth into collecting its tax.

City Councilwoman Ramona Taylor told both the A& P and City Council that the move is not just about improving collections but also to make the city’s A& P regulations consistent with the similar ordinances across the state. The new measure would not change the A& P tax rate but would provide the power to audit annually restaurants and hotels to make sure the full A& P tax is being paid.

“The legislature has made some changes, so we’ve done an amendment on the Continued from Page 1

collection of the A& P tax,” said Taylor. “It gives the A& P the authority to audit (hotels and restaurants) for the accuracy of their payments. It gets us in compliance for what the legislature is doing.”

The ordinance had its first reading in council chambers on Oct. 20, with two more readings scheduled in November before Council makes a final decision. The six-week process will allow time for input from the community.

“We’ll distribute (the ordinance) to get some feedback,” said Taylor.

The proposed change moves A& P taxpayers from a complete honor system to a procedure that presents the threat of an audit over restaurants and hotels.

“There has been concern for all the time I’ve been on the A& P – about 14 years – that someone is not paying and we don’t really know what is going on,” explained Taylor. “This gives us the ability to do that, should we choose to do it.”

“The ordinance would bring us up to date with all the legislature has been doing,” said Councilman James Pulliaum.

Commissioner Mike Patel asked how it would be done.

“We’d hire somebody that is already doing these audits in the state,” answered Taylor. “You couldn’t target someone. You couldn’t be audited but once a year. It’s to get a sense of ‘Are people paying and are the paying the right amount?’ Because as I understand it, it’s on an honor system.”

In introducing the ordinance to the council on Oct. 20, Mayor Bill Johnson noted, “This is to give us the authority, and puts us in compliance with the state law on that collection,” said Johnson. “Who knows? Revenue may go up with just the idea of an audit.”

City Attorney David Peeples drafted the amendment after meeting with Pulliaum and Taylor and explained the rationale to City Council.

“Right now we have an ordinance in place that sets up the Advertising & Promotion Commission and gives it certain authority which doesn’t quite cover all the authority available to it under state statutes,” said Peeples. “Under State statutes, there is the ability to have greater enforcement and collection ability.

Should they find a need for an audit, they’d have the ability to get that done.”

A second reading on the ordinance is expected at the Nov 3 City Council meeting.

By John Rech