North Little Rock restaurants that have their city tax permits revoked for falling too far behind on remitting taxes collected on prepared foods will now be charged $50 for a new permit and $100 for each subsequent revocation within a 12-month period.
The North Little Rock Advertising and Promotion Commission approved the changes, 6-0, Tuesday as a means to recoup administrative costs for repeated notifications mailed to delinquent restaurants. The new policy takes effect immediately.
All food services operating in North Little Rock are required to obtain an Advertising and Promotion Commission Tax Permit and collect a 3 percent tax on gross receipts of prepared food and beverages. Remittances to the commission are to be made monthly.
There isn't a charge for obtaining the initial permit, which doesn't expire unless the business closes or there's a change in ownership.
The commission, through the North Little Rock Convention and Visitors Bureau, sends a reminder letter if a food-service business fails to remit its monthly taxes on time. A notice of intent to revoke and then a notice of revocation are then sent by registered mail over the next two months if the tax payment still isn't received.
The 543 total mailings from December 2017-November 2018 cost the commission $1,551.01, according to figures presented to the commission. Each piece of registered mail costs $6.67.
"In some cases, we have to send multiple notices because people refuse the registered mail and we have to send out a new letter," said Bob Major, the Convention and Visitors Bureau president and chief executive officer. "We can send [city] code enforcement out to issue a citation for them to go to court. They hide from code officers."
If an owner receives a citation, Major said, he often will pay the delinquent tax bill before the court date to avoid any fine from the court.
"This is aimed at the repeat offenders who work the system," Karen Trevino, the bureau's chief financial officer, told commissioners.
Any food-service business is to remit taxes collected from customers in full by the last day of the month following the month that the taxes are collected. For example, taxes collected in January are due by the end of February.
A 5 percent late fee is charged on the estimated tax amount due for each month the tax is late, up to 35 percent for seven months. At that point, the commission files a certificate of indebtedness against the business owner.
Major proposed charging $40 to replace a revoked permit. Commissioners raised that to $50, with an increase to $100 for each subsequent revocation during a 12-month period.
"I don't care how high it is," Commission Chairman Tom Roy said. "Pay your dad-gum bill is how I feel."
The new fee isn't likely to affect the vast majority of North Little Rock restaurants, Major said.
"With most of those notices, it's the same person we're sending those to here, here and here," Major said, referring to the three dates that notices are mailed to delinquent businesses.
Arkansas Act 1102 that took effect in July 2015, exempts detailed information about lodging and restaurants taxes paid by hospitality businesses from being publicly disclosed.
Metro on 01/16/2019