CLEAR UP QUESTIONS ABOUT RESTAURANT TAX

Concerns still remain about Cape Girardeau's restaurant tax.

Yes, the issue of who is paying -- and who isn't -- was straightened out by the city. A faulty report issued a few weeks ago indicated a number of city restaurants may not have been paying the tax. After considerable finger pointing and red faces, it was determined that all but five were paying and the remainder had paid under different company names.

But the question of who should pay remains very much on the minds of restaurant owners.

The city levies a 1 percent tax on restaurant customers. That money is earmarked for the Convention and Visitors Fund. The money is used to pay the 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 revenue from the tax is sizable: The city took in $540,000 from the restaurant tax last year and another $305,000 from the hotel-motel tax.

At a recent Convention and Visitors Bureau Advisory Committee meeting, it was explained that one retail store with a restaurant was exempt because food sales were not the primary service.

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 customer."

But board member Dan Drury pointed out Holiday Inn's restaurant is not the Holiday's Inn's chief business. It is merely an amenity, he said.

Drury makes a reasonable argument -- one that the Cape Girardeau City Council should consider.

The time has come to take a new look at the city's restaurant tax. The tax should be levied equitably on all establishments that serve food.

Other businesses that don't have to collect the tax but fall in a gray area include bookstores with coffee shops, convenience stores that serve food, hospital cafeterias, bed and breakfasts and grocers that sell prepared food.

The issue of convenience stories has been disputed since the beginning of the restaurant tax. But new businesses with sideline food sales have only muddied the waters.

Such a change in the restaurant tax would require a referendum. Under Missouri Constitution, voters must approve all new taxes before they go into effect.

But this tax expansion is certainly worth further examination. It is an issue of fairness, and that is something both restaurant owners and taxpayers would understand.