CITY MUST CLEAR UP CONFUSION OVER RESTAURANT TAX COLLECTION

A report by a subcommittee of the Cape Girardeau Convention and Visitors Bureau Advisory Committee raised serious questions about the city's collection of the 1 percent restaurant tax. The report said 13 restaurants may not be paying the tax and asked the city manager to investigate.

The tax is important because that revenue -- along with a 3 percent hotel-motel tax -- goes into a special fund to pay off bonds on the Show Me Center, the Osage Community Centre, the Shawnee Park Sports Complex and expenses of the city's Convention and Visitors Bureau.

The most troubling fact of all was that a handful of restaurants weren't paying the tax because they didn't know about it -- and the city had no check and balance in place to make sure the money was paid.

One restaurant owner said he learned about the tax from a fellow restaurant owner and borrowed his home-made form. At least two restaurants began as other businesses and expanded into serving food on the premises. They were unaware of the tax.

These incidents cast a shadow of doubt on the entire process. How much tax revenue was lost? It is the city's responsibility to make sure all restaurants that qualify are paying this restaurant tax.

Restaurant tax collection is no small matter. The city took in $540,000 from the restaurant tax last year and $305,000 from the hotel-motel tax.

The report itself also pointed a finger at restaurants that were paying under another name. Some were understandably upset. In compiling the report, the committee should have gone the extra step to call the restaurants involved before listing names even in a preliminary report. That's because the report was discussed at a public meeting. It wasn't merely forwarded to the city for further study.

At least four of the 13 restaurants in question were paying under a different name. Others listed aren't covered by the ordinance and don't need to collect the tax.

The city code defines a restaurant as "any inn or establishment engaged solely or chiefly in the sale and serving of meals or lunches, where tables and chairs are provided for the customers."

Baskin-Robbins, one of the businesses named, paid the tax when it was first levied. But the city attorney ruled some time ago that the ice cream store is not a restaurant.

The city needs to review its own procedures to ensure that every restaurant pays the tax -- even if the business doesn't start as a restaurant. Part of the question is whether the restaurants that didn't know about the tax should pay it now. Restaurants collect the tax from customers and merely pass it along. To make the restaurants go back and produce months and maybe years of the tax now would constitute a hefty fine because it would come out of restaurant revenues.

The council should consider this issue closely and determine exactly where the fault lies before making a decision.