CVB VOTES TO RECOMMEND REVISED TAX

An expanded version of Cape Girardeau's hotel, motel and restaurant tax ordinance will be forwarded to the City Council for action.

The Convention and Visitors Bureau advisory commission voted Thursday to accept the revision of the existing tax, which redefines who pays the 1 percent restaurant tax and the 3 percent hotel/motel tax.

The City Council will decide on the final wording of the ordinance and whether or not it will go before voters for their passage.

Dan Drury was the only board member who voted against accepting the revised tax measure.

He disagreed with a decision Thursday to remove the word "cooled" from the definition of how foods subject to the restaurant tax might be prepared. The change was made on the advice of city attorney Eric Cunningham.

Voting in favor of the revision were board chair Gary Bunting, Walt Wildman, Dennis "Doc" Cain, Randy Kluge, Shirley Talley, Doug Ross and Beverly Estes.

The CVB has been working for several months to make the tax more equitable.

Under the current ordinance, the restaurant tax only applies to establishments whose primary business is selling meals or lunches and which have tables and chairs for customers.

The revision will expand the tax to apply to certain foods sold at supermarkets and convenience stores, such as prepared sandwiches, fountain drinks and some deli items.

Dennis Marchi, Schnucks store manager, told board members Thursday that he doesn't understand when the tax will have to be collected and when it won't.

"I guess where we're really concerned is, where do you draw the line?" Marchi asked.

The definition of "prepared" foods subject to the revised restaurant tax includes foods that are "assembled" on the premises.

Marchi said deli trays of meat and cheese sold at Schnucks are prepared at the store, but produce trays featuring fruit and vegetables come to the store already assembled.

"I'm having trouble considering what's `prepared,'" Marchi said.

"I think the objective of this is to be fair, and I hope whatever language is decided upon is applied in a commonsense manner," Wildman said.

The proposed expansion of the special use tax went through several revisions as members of a special subcommittee tinkered with the definitions of "restaurant" and "prepared."

On Thursday, the board agreed, it was time to let the City Council have its say.

"I think we've done as good a job as could be done and in light of that, I would like to see us send it on to the City Council," Wildman said, adding the city's voters will have the "ultimate authority" in whether the expanded tax is approved.

Talley, who chaired the subcommittee, said members worked long and hard to nail down the final version.

"We've tried to look down the road to 2004 (when the tax expires)," she said. "Our eating habits have changes since 1984 (when the tax was imposed). I'm sure when they look at this thing again in 2004, our eating habits may have changed since 1998. What we're trying to do is bring it up to date and make it fair."

The revised ordinance, if approved, would also expand the hotel/motel tax to include bed and breakfast establishments.

Proposed tax changes

Here are the major changes suggested for Cape Girardeau's hotel, motel and restaurant tax under a proposal approved Thursday by the Convention and Visitors Bureau advisory commission. The City Council must approve any proposed changes before the revisions go to city voters for their approval.

Restaurant tax

-- Changes the definition of restaurant to apply to any person, entity or establishment engaged in the retail sale of food prepared on or off the premises for consumption on or off the premises. This means the 1 percent restaurant tax would be applied to food sales by pizza delivery businesses, ice cream parlors, retailers' snack bars and caterers, and to certain items sold by convenience stores and supermarkets. Currently, a restaurant is defined as a business that is primarily engaged in selling food and that features tables and chairs for its patrons.

-- Changes the definition of "prepared" to include food items that are cooked, mixed, heated, assembled or served, including drinks dispensed from fountains.

Hotel/motel tax

-- Changes the definition of hotel or motel to include any structure or building containing "a room or rooms" furnished for lodging guests. The current ordinance says the 3 percent hotel/motel tax is applicable only to facilities with eight or more rooms for guests. If approved, the change would make bed and breakfasts responsible for collecting the tax.

What's exempt

-- Meals served to residents or patients at hospitals, nursing homes and convalescent centers and "Meals on Wheels"-type programs, which do not charge for meals but only request suggested donations.

-- Food, meals or hotel/motel lodging to individual or entities who are exempt from state and federal sales tax, including school, government and church groups. The current ordinance does not specifically exempt these groups from the special use tax.

City Council to decide

-- The CVB voted to forward the proposal to the City Council for action at the Dec. 15 council meeting, and the council will have the final decision on the proposal's final language and whether it will go on the ballot. If the tax changes are to appear on the April 7 ballot, the City Council must approved the revised ordinance on first reading at the Dec. 15 meeting.