Music Festivals Expect To Give County A Boost

Sales-Tax Revenue Likely To Rise

Arkansas Democrat-Gazette/MICHAEL WOODS 
The 2012 Wakarusa Music and Camping festival on Mulberry Mountain in Ozark, Arkansas.
Arkansas Democrat-Gazette/MICHAEL WOODS The 2012 Wakarusa Music and Camping festival on Mulberry Mountain in Ozark, Arkansas.

Festival organizers at Mulberry Mountain are projecting that Franklin County will receive a healthy boost in sales-tax revenue in 2013 thanks to increased music festival activity and a recent review of ticket sales by the Arkansas Department of Finance and Administration.

Mulberry Mountain Lodging and Events, located about 20 miles north of Ozark, is best known as the home of two annual music festivals: the Yonder Mountain String Band’s Harvest Music Festival, which draws about 5,000 attendees each year, and the Wakarusa Music and Camping Festival, which has drawn between 15,000 and 20,000 attendees each year since it relocated to Arkansas from Lawrence, Kan., in 2009.

Nathan Prenger, a producer with Pipeline Productions, based in Lawrence, said that when his company first applied for an Arkansas sales tax permit in 2009, the state responded that while Pipeline was required to collect sales tax from vendors selling tangible goods at the events, the tickets - which range in price from a $65 single day pass to more than $500 for a full-event, VIP package - would not be taxed.

Prenger said that in September 2012, officials with the Arkansas Department of Finance and Administration contacted Pipeline to revise their instructions.

“I think they just took a look at us, reviewed our case, and maybe realized they made a mistake,” Prenger said.

Roberta Overman, manager of the sales and use tax section of the department, said that while the festivals at Mulberry Mountain do fall under Arkansas Code Annotated 26-52-518, which governs taxation of special events, she was not permitted to discuss specific information regarding individual taxpayers or entities such as Pipeline.

Dewey Patton, events director at Mulberry Mountain, said that in 2012, the Wakarusa festival alone generated more than $43,600 in total sales tax from vendors. About $32,500 went to the state, based on its 6 percent statewide sales tax, and about $11,100 went to Franklin County, based on a1.5 percent county sales tax.

“We feel like there’s been some argument as to what the benefit to the county has been,” Patton said. “We bring in as many as 20,000 people to the area. They eat in their restaurants, shop in their shops, and buy gas in their gas stations. We’ve always made an argument that it’s a huge benefit to the tourism trade.”

Prenger said Pipeline has added an additional festival at Mulberry Mountain for 2013, Thunder on the Mountain, a country music festival featuring more than 40 country music artists. The festival, which is scheduled the weekend after the Wakarusa festival, is projected to draw as many attendees as Wakarusa.

Both Patton and Prenger each estimated that ticket sales on the three festival events will yield approximately $500,000 in tax revenue for the state and approximately $150,000 in tax revenue for Franklin County.

According to the Franklin County clerk office, the county’s annual budget for 2013 is about $3.6 million.

Prenger said that while some Franklin County officials had voiced concern that the large festivals were a drag on county law enforcement and medical services, the festivals actually contract with private vendors to provide security and medical services inside the events, and they reimburse Franklin County Emergency Medical Services for costs associated with keeping two ambulances stationed at the festival grounds.

Calls to the Franklin County sheriff’s office for comment were not returned.

Northwest Arkansas, Pages 9 on 02/28/2013

Upcoming Events