Alcohol-fee revision sparks calls in NLR

But restaurants told costs not rising

A sudden change in how North Little Rock will collect license fees from city restaurants that sell alcohol caused confusion and telephone calls Tuesday morning to the North Little Rock Chamber of Commerce.

The North Little Rock City Council on Monday night approved an amendment to allow a restaurant selling mixed drinks that opens in the second six months of the state fiscal year to pay only half of the $500 annual fee, instead of the full amount. The change is retroactive to Jan. 1.

The ordinance also adds penalties under different categories for late payment of taxes collected on alcoholic beverages consumed on-premises. The penalties will take effect July 1, which is the start of the state fiscal year, with the renewal of permits.

The amended ordinance was part of a special meeting Monday that was scheduled last week to deal with unrelated issues. The alcoholic-fee legislation was added to the special agenda Friday afternoon and voted on Monday without public comment.

The city's previous ordinance didn't allow for prorating of the fee, due on July 1, City Attorney Jason Carter said. The change "will bring us in line with the state's proration process," Carter said. The financial impact on the city concerning any restaurants that may be due a refund "should be very small," he said.

Other city licenses are issued for the calendar year in which city government operates.

The legislation doesn't increase any fees or taxes, but that became a misconception, Chamber of Commerce President Terry Hartwick said Tuesday.

"It was misinterpreted, I think," said Hartwick, adding that he also had misunderstood the intent. "I did get calls, yes. I kind of like it when we get calls because people, at least, are watching.

"They just heard it was a tax," Hartwick added, referring to some restaurant owners who called his office. "After we got the explanation everybody settled down."

Restaurants also need a city Advertising and Promotion Commission privilege license to operate and must collect a 3 percent sales tax on prepared food, but the prorating of the city fee on alcoholic beverages is separate from the Advertising and Promotion Commission permit, said Assistant City Attorney Paula Jones, who acts as the commission's attorney.

"There seemed to be some confusion, and I'm not sure how that happened," Jones said Tuesday afternoon, before the commission's quarterly meeting. "It didn't raise taxes. The penalty is for the people who do not pay on time. Before, the city had no penalty if the fee was paid late. Now there is."

Mayor Joe Smith said the prorating came from a complaint from the owner of a just-opened restaurant with a bar who was going to have to pay $500 now and another $500 in July for the next year.

"We do not have a provision in our ordinance to allow partial or prorated payment," Smith said at Monday's meeting. "If someone comes in during April, like someone did last week, they have to pay for the full year. The state allows the year to be divided in half."

Hartwick said that once he understood the council's action, he was able to explain to callers that the change was to help new establishments.

"It was just something the mayor was trying to do to help new business owners," Hartwick said. "He and I have talked, and I told him [the confusion] was probably me putting some ruffle in it, too. He was trying to do something good. It is a good thing."

Metro on 04/22/2015

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