CASHING IN ON DINING OUT

As of July 1, some 64 new businesses were added to the rolls for Cape Girardeau's hotel-motel-restaurant tax.

That addition, in keeping with an April vote to expand the tax to include bed and breakfast inns, convenience stores, supermarkets and other businesses, brought in nearly $13,000 in additional revenue in July and August.

The expanded hotel-motel-restaurant tax is now being collected by 161 businesses in the city.

John Richbourg, the city's finance director, said city staff are aware some businesses affected by the ordinance change still aren't collecting the tax, and are working with those businesses to rectify the situation.

"Basically, we're contacting them by phone and telling them that they're going to be responsible for collecting it," he said.

City staff had projected the expanded tax would bring in approximately $45,000 a year in additional revenue.

Restaurant tax collections for August 1998 were almost $12,000 higher than collections for August 1997.

Last month, the city collected $62,025.37 in restaurant tax revenue. In August 1997, collections totalled $50,187.47.

In July 1998, the first month the expanded restaurant tax was collected, revenues were only up about $6,000 from a year ago.

Collections from July 1998 totalled $50,373.06, compared to $44,271.20 for July 1997.

Total restaurant tax revenue for FY1997-98, which ended June 30, was $632,153.14

July and August revenues this year totalled $112,398.43.

The increase hasn't been as dramatic in the city's 3 percent hotel-motel tax, which was expanded to include bed and breakfast inns.

Collections so far this fiscal year -- July and August -- total $65,562.35, compared to $59,612.23 for July and August 1997.

In FY1997-98, hotel-motel tax revenue totalled $330,418.77

The hotel-motel tax profile isn't all profit. In July, the city collected $7,214.26 in additional revenue due to the expansion of the 3 percent tax.

But a change in the new ordinance to make hotel guests who were exempt from state and federal sales tax exempt from the city hotel-motel tax cut $2,342.38 in collections, for a net gain of $4,871.88.

If a business remains delinquent on collecting either tax that business could lose its license to operate, Richbourg said.

But it's too soon to talk about yanking business licenses just yet, he said.

"I don't think we're going to be doing that after one month's delinquency," Richbourg said. "Some of the first month may have been ignorance of not knowing they had to pay."

Restaurants that weren't collecting the 1 percent tax prompted the change in the city ordinance that voters approved in April.

Members of the city's Convention and Visitors Bureau learned some restaurants weren't collecting the tax and began looking at ways to make enforcement of the ordinance more equitable.

A CVB report released in April 1997 listed 13 establishments that weren't collecting the restaurant tax. It was later learned that some of those businesses were never informed they had to collect the 1 percent tax.

Over the next several months, CVB members and city staff worked to redefine who should collect the restaurant tax. CVB members said they were trying to make levying and collecting the tax fair by requiring every business that sold prepared foods or fountain drinks collect the 1 percent tax.

Now, all restaurants, convenience stores, department stores with snack bars, bookstores with coffee shops, ice cream parlors, bakeries, delis and pizza delivery businesses are required to collect the tax, as are grocery stores that sell prepared foods -- deli sandwiches, fountain drinks and other items.

David Ross, a member of the CVB advisory board, said he thinks the board got what it wanted.

"I don't think that the CVB board wants to be in the position of being a watchdog," Ross said. "My sense is they want to be fair, and with the process of including the convenience stores and all of the new people who've been added on, we've accomplished that. As a result of that, we're seeing an increase in the revenue come in. Those are all good things."

The hotel-motel-restaurant tax funds the operation of the CVB and pays off bond debt for the Show Me Center, the Osage Community Centre and the Shawnee Park Sports Complex.