CVB COMMITTEE REVIEWS PROPOSED TAX LANGUAGE

A city subcommittee reviewing Cape Girardeau's hotel, motel and restaurant tax tinkered a little further with the language for a proposed revision in the tax Tuesday.

One of the changes agreed on Tuesday would make the 1 percent tax applicable to fountain drinks purchased at convenience stores or other sites not traditionally considered restaurants.

The full Convention and Visitors Bureau advisory commission will hold a special meeting Thursday to decide its stance on the proposal.

The tax change is now being considered for placement on the April 7 ballot.

In order for the proposal to appear on the ballot, the City Council will have to approve it on first reading at its Dec. 15 meeting.

The council will have the final say on whether or not the proposal goes on the ballot and its exact wording.

The subcommittee met in closed session Tuesday with city attorney Eric Cunningham before announcing the latest revisions.

Subcommittee members also decided to further revise the definition of restaurant in the ordinance, which determines who pays the 1 percent restaurant tax.

The latest definition says a restaurant is "any inn, establishment, person or entity engaged in the retail sale of food prepared by the restaurant, or by using the restaurant's facilities, on or off the premises and sold for consumption within or away from the premises."

Tuesday's revisions also include adding soft drinks dispensed from fountains in the definition of foods that are "prepared" at restaurants.

The ordinance now in effect says a restaurant is a business primarily engaged in selling meals and featuring tables and chairs for customers.

Members of the subcommittee say they just want to make sure the restaurant tax is assessed fairly to all businesses in the city that sell food that's ready to eat.

Dan Drury, a member of the subcommittee and an owner of hotels and restaurants, said he has to collect restaurant taxes on the same items now tax-exempt at other businesses.

If a customer buys a hamburger at one of Drury's Burger King restaurants, Drury has to collect the 1 percent restaurant tax.

But the same burger bought at Target's snack bar is currently exempt from the restaurant tax because food isn't Target's primary business.

That's not fair, Drury said.

"One percent is 1 percent," Drury said.

The revisions being suggested by the subcommittee would change that, subcommittee members say.

The revised definition of "restaurant" will also mean caterers not currently affiliated with businesses like Port Cape Girardeau will be subject to the restaurant tax.

The subcommittee has also revised which entities have to pay the hotel and motel tax.

The latest version of the ordinance says the tax would apply to any structure that includes "a room or room" furnished for lodging guests.

The current ordinance says the tax applies only to businesses with eight or more rooms.

The revised version would require the city's bed and breakfast businesses to collect the tax.

The latest revision also stipulates that the tax will not apply to sales made to individuals or groups who can prove they are exempt from paying state or federal sales taxes, such as government, school or church organizations.

Meals served to patients or residents of hospitals, nursing homes and convalescent centers are exempt from the restaurant tax under the proposed revisions.

Members of the subcommittee say they're also concerned with enforcing collection of the hotel, motel and restaurant tax.

A report released earlier this year revealed that several restaurants weren't collecting the tax -- some because they had never been notified that they needed to.