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Home My WebLink AboutOrdinance 5283 �iili��ll�ll��lll�llllll�llllllll�llll�lll�ll� ll��llll��lll��lll �ll�lll�lllll , Doc ID : 013170230002 Type : REL Kind : ORDINANCE Recorded : 11/ 17/2009 at 03 : 28 : 29 PM Fee Amt : $20 . 00 Pace 1 of 2 Washinoton Countv . AR Bette Stamps Circuit Clerk Flle2009-00036592 ORDINANCE NO. 5283 I I AN ORDINANCE TO AMEND CHAPTER 35 : TAXATION OF THE FAYETTEVILLE CODE TO INCORPORATE AMENDMENTS OF STATE LAW AFFECTING THE HOTEL, MOTEL AND RESTAURANT TAX I WHEREAS, on March 1 , 1977, the Fayetteville Board of Directors passed Ordinance No. 2310 levying a one percent Hotel, Motel, and Restaurant Tax and creating the Advertising and Promotion Commission; and I WHEREAS, on July 5, 1995, the City Council passed Ordinance No. 3900 which levied a one percent Hotel, Motel, and Restaurant tax to be used by the City Parksand Recreation Department for the promotion and development of City parks and recreation areas; and I WHEREAS, Ordinance No. 3900 was referred to the voters pursuant to A.C.A. § 14-55- 301 (a) who adopted the ordinance; and WHEREAS, state law has been amended since the passage of those ordinances (which have been codified into Chapter 35 : Taxation of the Fayetteville Code); and WHEREAS, the City Council desires to incorporate all aspects of the current state law regarding the Hotel, Motel and Restaurant tax into the Fayetteville Code. i NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 : That the City Council of the City of Fayetteville, Arkansas hereby amends the names of Article II and Article III of Chapter 35 : Taxation of the Fayetteville Code from their current "Transient Occupancy Tax" and "Additional Occupancy Tax" to "Hotel, Motel and Restaurant Tax" and "Parks Hotel, Motel and Restaurant Tax." I Page 2 Ordinance No. 5283 Section 2 : That the City Council of the City of Fayetteville, Arkansas hereby amends Chapter 35 : Taxation of the Fayetteville Code by amending §35 .20 Levy of Tax and §35 .31 Levy of Parks HMR tax by adding a following sentence at the end of each section: "The levy of this tax shall also be applied to and include all items described in A.C.A. §26-75-602 Levying authority as currently enacted and as may be amended in the future." Section 3 : That the City Council of the City of Fayetteville, Arkansas hereby amends §35.24 Advertising and Promotion Fund, subsection (B) by enacting and adding the following sentence: "The Advertising and Promotion Fund may be used for any purpose authorized by state law within A.C.A. §26-75-606 as currently enacted and as may be amended in the future." ��arrnrrrnr PASSED and APPROVED this 20c' day of October, 2009. $ xERW?n g ,� Ga �,\S Y O,c�•.�,G� APPROVED: ATTEST: = * FAYETTEVILLE & 3 � dXy,N:QkANSP�J-RL By: By: �r ' • • O LD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer a� AGENDA REQUEST i N 13-c�1 FOR: COUNCIL MEETING OF OCTOBER 20, 2009 FROM: KIT WILLIAMS, CITY ATTORNEY ORDINANCE OR RESOLUTION TITLE AND SUBJECT: AN ORDINANCE TO AMEND CHAPTER 35: TAXATION OF THE FAYETTEVILLE CODE TO INCORPORATE AMENDMENTS OF STATE LAW AFFECTING THE HOTEL, MOTEL AND RESTAURANT TAX APPROVED FOR AGENDA: City Attorney Date plot3169 To�'3 4 • 1 a — 13 • 2oe9 Finance Director & Internal Services Director Date /o - 'ef of taff Date Yayyor Date I I FAYETTEVILLE THE CITY OF FAYETTEVILLE, ARKANSAS KIT WILLIAMS, CITY ATTORNEY DAVID WHITAKER, ASST. CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE LEGAL DEPARTMENT TO: Lioneld Jordan, Mayor City Council Don Marr, Chief of Staff FROM: Kit Williams, City Attorney DATE: October 13, 2009 RE: Updating Fayetteville Code To Mirror State Law For Hotel, Motel and Restaurant Tax Revenue Sources and Uses The State Legislature has broadened the allowed sources and uses of HMR revenue in the years since Fayetteville adopted its levying ordinance. In 2001 , the City Council did amend the Fayetteville Code to broaden the definition of restaurants as allowed by state law. In order to ensure the Advertising and Promotion Commission has the legal authority to fund or loan its revenues tot the Botanical Garden Society, I recommend the City Council also amend our Code to mirror current state law. I My proposed language "as currently enacted and as may be amended in the future," will keep our Fayetteville Code in accordance with any further amendments to state law of the definitions of hotels, motels, and restaurants and allowed purposes for use of the A & P Commission' s funds. j Since the City Council referred Ordinance 3900 establishing the Parks HMR tax to the voters, an amendment by the City Council requires a two-thirds vote of "members elected to . . . the City Council . . . ." (Amendment 7 of the Arkansas Constitution.) Therefore, an amendment to the Parks HMR ordinance requires six of the eight aldermen to vote yes. A mayor cannot vote on issues involving Amendment 7. I 4 i I i I I i ORDINANCE NO, AN ORDINANCE TO AMEND CHAPTER 35: TAXATION OF THE FAYETTEVILLE CODE TO INCORPORATE AMENDMENTS OF STATE LAW AFFECTING THE HOTEL, MOTEL AND RESTAURANT TAX WHEREAS, on March 1, 1977, the Fayetteville Board of Directors passed i Ordinance No. 2310 levying a one percent Hotel, Motel, and Restaurant Tax and creating the Advertising and Promotion Commission; and WHEREAS, on July 5, 1995, the City Council passed Ordinance No. 3900 which levied a one percent Hotel, Motel, and Restaurant tax to be used by the City Parks and Recreation Department for the promotion and development of City parks and recreation areas; and WHEREAS, Ordinance No. 3900 was referred to the voters pursuant to A.C.A. §14-55-301 (a) who adopted the ordinance; and WHEREAS, state law has been amended since the passage of those ordinances (which have been codified into Chapter 35: Taxation of the Fayetteville Code); and WHEREAS, the City Council desires to incorporate all aspects of the current state law regarding the Hotel, Motel and Restaurant tax into the Fayetteville Code. NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends the names of Article 1I and Article III of Chapter 35: Taxation of the Fayetteville Code from their current "Transient Occupancy Tax' and "Additional Occupancy Tax" to "Hotel, Motel and Restaurant Tax" and "Parks Hotel, Motel and Restaurant Tax." I I i Section 2: That the City Council of the City of Fayetteville, Arkansas hereby amends Chapter 35: Taxation of the Fayetteville Code by amending §35.20 Levy of Tax and §35.31 Levy of Parks HMR tax by adding a following sentence at the end of each section: "The levy of this tax shall also be applied to and include all items described in A.C.A.§26-75-602 Levying authority as currently enacted and as may be amended in the future." Section 3: That the City Council of the City of Fayetteville, Arkansas hereby amends §35.24 Advertising and Promotion Fund, subsection (B) by enacting and adding the following sentence: "The Advertising and Promotion Fund may be used for any purpose authorized by state law within A.C.A. §26-75-606 as currently enacted and as may be amended in the future." PASSED and APPROVED this 20f day of October, 2009. APPROVED: ATTEST: By: By: LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer i FAYETTEVILLE CODE OF ORDINANCES TITLE III ADMINISTRATION CHAPTER 35: TAXATION athletic events, barbecue stands and other on-going ARTICLE I stands, whether mobile or stationary, will collect the TAX ON REAL AND Parks HMR tax. PERSONAL PROPERTY Convenience stores. All food and beverages 35.01 Levying Of Tax prepared on site are taxable. Defis. Delis shall include establishments selling (A) A tax is hereby levied on the real and personal prepared food or beverage as defined, however this property within the city. tax shall not apply to sliced meat and/or cheese sold (B) The tax so levied and the rate provided therefor by the pound. are hereby certified to the County Clerk, to be Prepared food or beverage. Any food or placed in the tax book by the County Clerk and beverage product prepared or altered in a collected in the same manner that the county and food/beverage establishment for sale. school district taxes are collected. (Ord. No. 4317, 6-5-01) (C) The City Clerk is hereby authorized and directed to file certified copies of this section in the office 'Note-The definitions section of this ordinance was of the County Recorder, County Clerk, County assigned a new number to make it consistent Wth other Assessor, and the County Tax Collector. definition sections throughout this code and arranged in alphabetical order by this codifier. (Ord. No. 3384, 10-18-88; Code 1991 , §35.01) 35.20 Levy Of Tax State law reference(s)--Taxation generally, A.C.A. There is hereby levied, effective, a tax of 1 % (the tax) §26-73-101 et seq.; Levying of tax, A.C.A. §26-75-207. upon the gross receipts from the renting, leasing or otherwise furnishing of hotel or motel C 35.02-35.18 Reserved accommodations for profit in the city and upon the portion of gross receipts or gross proceeds received ARTICLE II by restaurants, cafes, cafeterias, delis, drive-in TRANSIENT OCCUPANCY TAX' restaurants, carry-out restaurants, concession stands, convenience stores, grocery store-restaurants, caterers and similar businesses as may be defined 35.19 Definitions from time to time by ordinance from the sale of prepared food and beverages for on or off-premises Bakeries, donut shops and ice cream shop. consumption, but such tax shall not apply to such These are included within the definitions of "similar gross receipts or gross proceeds of organizations businesses" of this ordinance and are therefore qualified under §501 (c)(3) of the Federal Internal subject of this tax. Revenue Code. *OM J111111111IIIIIIII 1111114 Beverage shops. Businesses that sell beverages (Code 1965, §78A-1(a); Ord. No. 2310, 3-1-77; Ord. No. prepared or dispensed at their business are included 2648, 7-15-80; Ord. No. 2711 , 3-24-81; Ord. No. 2869, 10- within the definition Of "similar businesses" Of this 19-82, Ord. No. 4317, 6-5-01; Code 1991, §35.20) ordinance and are therefore subject to this tax. Cross reference(s)—Penalty, §35.99. Caterers. Caterers are for profit businesses or State law reference(s)--Authority generally. A.C.A. persons who deliver or serve catered food or §26-75-602. beverages at a location within the city limits of Fayetteville. 35.21 Collection; When Payment Due Concession stands. Stands run by non-profit The tax shall be collected from the purchaser or user groups are excluded from this taxation, as well as of the food or accommodations by the person, firm, stands operated on a short term basis, such as First corporation, association, trust, or estate (or other Night, Springfest, Autumnfest and county fairs. Other entity of whatever nature) selling such food or stands operated on a recurring basis, such as for furnishing such accommodations (the taxpayer), and C035:3 i FAYETTEVILLE CODE OF ORDINANCES TITLE III ADMINISTRATION the taxpayer shall remit to the city by the 20th day of taxes shall be assessed at the rate of 10% per each month all collections of the tax for the preceding annum. In addition, the city may exercise all powers month, accompanied by reports on forms to be listed under A.C.A. §26-75-603 (c) as may be prescribed by the mayor. amended from time to time and may utilize the provisions of A.C.A. §26-75-603 (d) and (e) amended (Code 1965, §18A-1(b); Ord. No. 2310, 3-1-77; Ord. No. from time to time in enforcing the tax. 2648, 7-15-80; Ord. No. 2711 , 3.24-81 ; Ord. No. 2869, 10- it 19-82; Code 1991 , §35.21) (Ord. No. 4303, 3-20-01 ) State law reference(s)-Gross receipts taxes State law references)—A.C.A §26-75-603, collection authorized, A.C.A. §26-75.602. of tax. 35.22 Application Of Rules And 35.26 Examinations And Investigations Regulations The collector of the tax in order to enforce the tax, by As provided in A.C.A. §26-52-301 et seq., as determining the accuracy of taxpayer reports and amended, together with the rules and regulations remittances, or fixing any liability under the ordinance, thereunder, shall, so far as practicable, apply to the may make an examination or investigation of the administration, collection, assessment, and place of business, the tangible personal property, enforcement of the tax. equipment, and facilities, and the books, records, papers, vouchers, accounts, and documents of any (Code 1965, §18A-1 (c); Ord. No. 2310, 3-1-77; Ord. No. taxpayer or other person. Every taxpayer or other 2648, 7-15-88; Ord. No. 2711, 3-24-81 ; Ord. No. 2869, 10- person and his agents and employees shall exhibit to 19-82; Code 1991 , §35.22) the collector these places and items and facilitate any State law references)-Tax levied. §26-52-301 at seq 1. examination or investigation. 35.23 Repealed (Ord. No. 4303, 3-20-01) See 33.311 35.27 Rules And Regulations 35.24 Advertising And Promotion Fund The city after notice and public hearing may pass any rules and regulations necessary for carrying into —' effect the provisions for the enforcement of this (A) There is hereby created the city Advertising and ordinance. Promotion Fund, to which fund there shall be credited all collections of the tax. (Ord. No. 4303, 3-20-01) (B) The city Advertising and Promotion Fund shall be 35.28-35.29 Reserved / / _ T used, in the manner determined by the city (_ Y1 A^ JlZ Advertising and Promotion Commission, ARTICLE III exclusively for the advertisement and promotion of the city and its environs and/or for the DDITIONAL OCCUPANCY TAX' construction, maintenance, repair, and operation of a convention center, including the pledge of 35.30 Definitions revenues therein to the payment of bonds issued un er A.C.A. §26-75-607. ,t,_�a LC Bakeries, donut shops and ice cream shop. D O 5 C N These are included within the definitions of "similar (Code 1965, §18A-1(d), (e); Ord. No. 2310, 3-1-77; Ord. No. businesses" of this ordinance and are therefore 2648, 7-15-80; Ord. No. 2711 , 3-24-81 ; Ord. No. 2869, 10- subject of this tax. 19-82; Code 1991, §35.24) State law reference(s)-A.C.A. §26-75-607, Authority Beverage shops. Businesses that sell beverages to issue bonds. prepared or dispensed at their business are included within the definition of "similar businesses" of this 35.25 Penalties And Enforcement ordinance and are therefore subject to this tax. The city may assess penalties and interest against taxpayers who fail to timely report or pay the tax. The Caterers. Caterers are for profit businesses or penalty shall be equal to five percent of the unpaid tax persons who deliver or serve catered food or amount per month not to exceed a total assessment beverages at a location within the city limits of of 35% of the unpaid lax. Simple interest on unpaid Fayetteville. CD35:4 FAYETTEVILLE CODE OF ORDINANCES TITLE III ADMINISTRATION (B) Proceeds of the additional 1 % tax shall be Concession stands. Stands run by non-profit deposited into a special fund established by the groups are excluded from this taxation, as well as city to be used for the development, construction, stands operated on a short term basis, such as First and maintenance of city parks. The funds shall Night, Springfest, Autumnfest and county fairs. Other be disbursed by the mayor upon approval of the stands operated on a recurring basis, such as for City Council. athletic events, barbecue stands and other on-going stands, whether mobile or stationary, will collect the (Ord. No. 3900, §2. 7-5-95; Code 1991 , §35.32) Parks HMR tax. State law reference(s)--A.C.A Collection of tax § 26-75-603. Convenience stores. All food and beverages prepared on site are taxable. 35.33 Penalties And Enforcement The city may assess penalties and interest against Delis. Delis shall include establishments selling taxpayers who fail to timely report or pay the tax. The prepared food or beverage as defined, however this penalty shall be equal to five percent of the unpaid tax tax shall not apply to sliced meat and/or cheese sold amount per month not to exceed a total assessment by the pound. of 35% of the unpaid tax. Simple interest on unpaid taxes shall be assessed at the rate of 10% per Prepared food or beverage. Any food or annum. In addition, the city may exercise all powers beverage product prepared or altered in a listed under A.C.A. §26-75-603 (c) as may be foodibeverage establishment for sale. amended from time to time and may utilize the provisions of A.C.A. §26-75-603 (d) and (e) as may (Ord. No. 4317, 6-5-01 ; Ord. No. 4318, 6-5-01) be amended from time to time in enforcing the tax. State law references)—Gross receipts tax authorized, (Ord. No. 4302. 3-20-01 ) A.C.A. §26-75-602(c)(2). Fed law reference(s)--F.I.R.C. §501(c)(3) 35.34 Examinations And Investigations The collector of the tax in order to enforce the tax, by 35.31 Levy Of Parks HMR Tax determining the accuracy of taxpayer reports and remittances, or fixing any liability under the ordinance, There is hereby levied, a tax of 1 % (the tax) upon the may make an examination or investigation of the gross receipts or gross proceeds from the renting, place of business, the tangible personal property, leasing, or otherwise furnishing of hotel or motel equipment, and facilities, and the books, records, accommodations for profit in the city and upon the papers, vouchers, accounts, and documents of any portion of the gross receipts or gross proceeds taxpayer or other person. Every taxpayer or other received by restaurants, cafes, cafeterias, delis, drive- person and his agents and employees shall exhibit to in restaurants, carry-out restaurants, caterers and the collector these places and items and facilitate any similar businesses as may be defined from time to examination or investigation. time by ordinance from the sale of prepared food and beverages for on or Off-premises consumption, but (Ord. No. 4302, 3-20-01) such tax shall not apply to such gross receipts or gross proceeds of organizations qualified under 35.35 Rules And Regulations §501(c)(3) of the Federal Internal Revenue Code. � The city after notice and public hearing may pass any �p p Sr rt�N GG µ>G/C C rules and regulations necessary for carrying into (Ord. O. 3900. §t, 7-5-95; Ord. No. 4316, 6-5-01; Code 1991 , §35.31) effect the provisions for the enforcement of this ordinance. State law reference(s)--Penalty, A.C.A. §26-75-601 at seq. (Ord. No. 4302. 3-20-01 ) 35.32 Disposition Of Revenues 35.36-35.39 Reserved (A) The revenues collected from the additional tax of 35.40 Enforcement Of Tax Laws And 1 % shall be used by the city parks and recreation Code Compliance For Outdoor Vendors department for the promotion and development of During The Bikes, Blues, And Barbeque, city parks and recreation areas. Inc. Annual Festival I CD35:5 I FAYETTEVILLE CODE OF ORDINANCES _ TITLE III ADMINISTRATION (A) During the annual Bikes, Blues and Barbeque festival; Bikes, Blues and Barbeque, Inc. shall ensure that all outdoor vendors have all necessary health permits and zoning compliance permits prior to issuing its permit to allow the vendor to operate. (B) Bikes, Blues and Barbeque, Inc. shall require all of its authorized vendors to conspicuously display its authorizing permit during all hours of operation. (C) Bikes, Blues and Barbeque, Inc. shall ensure that each authorized vendor shall remit all required sales and use taxes at the end of each day's operation and shall remove its authorizing permit from any vendor who fails to timely and completely remit these taxes. (D) If a vendor attempts to sell goods or services without all the required permits conspicuously displayed, such vendor shall be guilty of a violation and be subject to the penalty provided for in §35.99. (E) The above permit requirement shall not be applicable to vendors at the Fayetteville Farmer's i Market, for merchants with an established physical address and building and established record of proper HMR tax remission to the City, or other vendors specifically exempted by state law from such permit requirements. (OM. 4912, 8-15-06) 35.41 -35.98 Reserved 35.99 Penalty It shall be unlawful for any taxpayer, as defined in §35.21, to fail to remit to the city by the twentieth day i of each month all collections of the tax for the preceding month as levied by §35.20, and, upon conviction thereof, the taxpayer shall be punished by a fine of not more than $500.00, or double that sum for each repetition of such offense. (Code 1965, §18A-(b); Ord. No, 2310, 3-1-77; Ord. No. 2648, 7-15-80; Ord. No. 2711 , 3-24-81; Ord. No. 2869, 10- 19-82) Note—Ordinance No. 4318, adopted June 2001 , enacts provisions to add a new section which is now included §35.30 definitions, to be consistent with this Code. CD35:6 I FAYETTEVILLE THE CITY OF FAYETTEVILLE, ARKANSAS KIT WILLIAMS, CITY ATTORNEY DAVID WHITAKER, ASST. CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE LEGAL DEPARTMENT TO: Lioneld Jordan, Mayor City Council A & P Commissioners FROM: Kit Williams, City Attorney _ DATE: October 13, 2009 RE: Legality of no interest loan to Botanical Garden Society from A & P Commission State law allows the Advertising and Promotion Commission to use its funds for the "(o)peration of tourist promotion facilities in the city . . . if the city owns an interest in the . . . facility . . . ." A.C.A. §26-75-606 (a) (iii) . The law further allows A & P funds to "be used, spent or pledged by the commission in addition to all other purposes prescribed in this subchapter, on and for the . . . operation of public recreation facilities in the city . . . if the city owns an interest in the . . . facility . . . ." A.C.A. §26-75-606 I (b)(2). The law also states that revenues from the HMR tax may be used or pledged "for the operation of tourist-oriented facilities, including . . . family entertainment facilities . . . ." A.C.A. §26-75-606 (b) (1)(A) . These A & P Commission funds may only be used if the A & P Commission determines that such funding generally promotes or encourages tourism and is not "utilized for expenditures that are normally paid from the general revenues of the city ." A.C. A. §26-75-606 (c) (4). State law, thus appears to give the A & P Commission the power to use or pledge funds for the operation of the Botanical Garden in Lake Fayetteville Park. If the A & P Commission can "use" funds, I think the broad term "use" can include a no interest loan. The state law I have quoted has evolved over time to allow the A & P Commissions throughout Arkansas more discretion of the use of their funds. Some of the statutory authority granted to A & P Commissions relevant to this request to fund the operation of the Botanical Garden was added after the City of Fayetteville passed ordinances establishing the A & P Commission and granting it the powers then existing in state law. Prior to using $50,000.00 of its A & P Commission revenues to fund the operation of the Botanical Garden, it would be advisable to amend the Fayetteville Code to match current state law. I will draft such an amendment to the Fayetteville Code if Mayor Jordan wishes to present it for City Council consideration during its Agenda meeting today. I I