A bid to require elections for municipal voters to approve hotel and restaurant taxes failed in a Senate committee Wednesday.
Sen. Jonathan Dismang, R-Beebe, said Senate Bill 180 would require cities to have elections if they want to enact an advertising and promotion tax, which is sometimes called a “hamburger tax.”
Generally, the tax is an extra levy on restaurant sales and hotel bills. The money raised is used mainly to promote tourism.
Dismang presented SB180, which is sponsored by Sen. Johnny Key, R-Mountain Home, to the Revenue and Taxation Committee. Dismang said Searcy tried to enact a hotel/restaurant tax and he wants to make sure that if that city does so again, the citizens get to vote on it.
Dismang emphasized that it would do nothing to hotel/ restaurant taxes already on the books. He said it would only affect cities that want to enact the tax.
Paul Young of the Arkansas Municipal League testified against the bill. He said the current system works fine because citizens who oppose a city government’s effort to enact the tax may start a petition drive to force an election.
Sens. Bill Sample, R-Hot Springs, and Jerry Taylor, DPine Bluff, agreed. “If it’s not broke, we ought not to be fixing it,” Taylor said.
Frank Kaye of Mountain Home testified for the bill, saying the City Council there tried to enact a hotel/restaurant tax, but citizens forced a vote to beat it.
Sen. Eddie Joe Williams, RCabot, likened the bill to the American ideal of no taxation without representation.
But Sen. Linda Chesterfield, D-Little Rock, said Williams’ comparison was flawed because voters in a city have representation in their elected city officials.
Northwest Arkansas, Pages 18 on 02/27/2011