DRAFT - ORDINANCE NO. ________
AN ORDINANCE LEVYING AN ADVERTISING AND TOURISM PROMOTIONS TAX ON THE GROSS RECEIPTS OF CERTAIN INDUSTRIES RELATED TO THE ADVERTISING AND TOURISM PROMOTION OF THE CITY OF PEA RIDGE, CREATING THE CITY OF PEA RIDGE, ARKANSAS, ADVERTISING AND TOURISM PROMOTION FUND, AND THE CITY OF PEA RIDGE, ARKANSAS, ADVERTISING AND TOURISM PROMOTION COMMISSION, AND FOR OTHER PURPOSES; PRESCRIBING OTHER MATTERS PERTAINING THERETO; DECLARING AN EMERGENCY; AND FOR OTHER PURPOSES.
WHEREAS, pursuant to Arkansas Code Annotated §§ 26-75-601, et seq., a City of the First Class may, by ordinance of the City Council, levy a tax not to exceed three percent (3%) upon the gross receipts or gross proceeds derived from: (a) renting, leasing, or otherwise furnishing hotel, motel, or short-term rental accommodations for sleeping, meeting, or party room facilities for profit but excluding accommodations of thirty (30) days or more; and (b) restaurants, cafes, cafeterias, delicatessens, drive-in restaurants, carry-out restaurants, concession stands, convenience stores, grocery store-restaurants, or similar businesses from the sale of prepared food and beverages for on-premises or off-premises consumption, but excluding the gross receipts or gross proceeds of organizations qualified under 26 U.S.C. § 50l(c)(3), as may be amended from time to time; and
WHEREAS, the City of Pea Ridge recognizes the need to create an Advertising and Tourism Promotion Fund to be known as the Pea Ridge Advertising and Tourism Promotion Fund to be used for advertising and tourism promotion for promoting the City of Pea Ridge, Arkansas; and
WHEREAS, the City of Pea Ridge, Arkansas, recognizes that it is in the best interests of the City of Pea Ridge, Arkansas, and its citizens to enact an Ordinance implementing the levies set forth herein and that the need to provide revenue for parks, recreation, advertising, and tourism promotion is an emergency.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Pea Ridge, Arkansas:
Section 1: Addition of Chapter 3.30 to Title 3 of the Pea Ridge Municipal Code. Chapter 3.30 is hereby added to Title 3 of the Pea Ridge Municipal Code and shall read as follows:
"CHAPTER 3.30
ADVERTISING AND TOURISM PROMOTION
Sections:
3.30.01 Findings; general policy
3.30.02 Definitions
3.30.03 Levy of Gross Receipts Tax
3.30.04 Creation of Pea Ridge Advertising and Tourism Promotion Commission
3.30.05 Creation of Pea Ridge Advertising and Tourism Promotion Fund
3.30.06 Penalties and interest for violation of this chapter
3.30.07 Injunction
3.30.01 Findings; general policy The city council finds that, due to the city's proximity to the Pea Ridge National Military Park, the large number of annual tourists and visitors in the area, and the continued growth of the City of Pea Ridge, an additional focus on advertising and tourism is needed to enhance the public health and welfare, and local quality of life.
3.30.02 Definitions
As used in this chapter:
Gross Receipts Tax – Restaurants A tax of one percent (1.00%) upon the activities defined in Ark. Code Ann. § 26-75-602(c)(2) as may be amended from time to time and including, but not limited to, the gross receipts or gross proceeds from by restaurants, cafes, cafeterias, delicatessens, drive-in restaurants, carry-out restaurants, concession stands, convenience stores, grocery store-restaurants, or any other, similar, business for the sale of prepared food and non-alcoholic beverages for on-premises or off-premises consumption, but excluding the gross receipts or gross proceeds of organizations qualified under 26 U.S.C. § 50l(c)(3), as may be amended from time to time.
Gross Receipts Tax – Lodging A tax of three percent (3.00%) upon the activities defined in Ark. Code Ann § 26-75-602(c)(l) as may be amended from time to time and including, but not limited to, the gross receipts or gross proceeds from renting, leasing, or otherwise furnishing hotel, motel, or short-term rental accommodations for sleeping, meeting, or party room facilities, cabins, cottages, bed and breakfasts, camp grounds, for profit but excluding any rental or lease of any such accommodation for periods of thirty (30) days or more. (Ord. No. ____, § 1)
3.30.03 Levy of Gross Receipts Tax
A. From and after March 1, 2023, the Gross Receipts Tax - Restaurant, shall be levied within the corporate limits of the City of Pea Ridge, Arkansas. The tax herein levied shall be paid by the persons, firms, corporations or entities liable therefore, and shall be collected by the Pea Ridge Advertising and Tourism Promotion Commission in the same manner and at the same time as the gross receipt tax levied by the Arkansas Gross Receipts Act of 1941, Ark. Code Ann. § 26-52-101, et seq., as may be amended from time to time, and pursuant to other ordinances of the City of Pea Ridge or rules adopted by the Pea Ridge Advertising and Tourism Promotion Commission.
B. From and after March 1, 2023, the Gross Receipts Tax - Lodging, shall be levied within the corporate limits of the City of Pea Ridge, Arkansas. The tax herein levied shall be paid by the persons, firms, corporations or entities liable therefore, and shall be collected by the Pea Ridge Advertising and Tourism Promotion Commission in the same manner and at the same time as the gross receipt tax levied by the Arkansas Gross Receipts Act of 1941, Ark. Code Ann. § 26-52-101, et seq., as may be amended from time to time, and pursuant to other ordinances of the City of Pea Ridge or rules adopted by the Pea Ridge Advertising and Tourism Promotion Commission.
C. The person paying the tax shall report and remit said tax on forms provided by the Commission and as directed by the Commission. The rules, regulations, forms of notice, assessment procedures, and the enforcement and collection of the tax under the Arkansas Gross Receipts Act shall, so far as practicable, be applicable with respect to the enforcement and collection of the tax levied pursuant to the authority of Arkansas Code Annotated § 26-75-603. The administration and enforcement, and all actions shall be by and through the proper Commission officials or agents.
D. The tax levied in this chapter shall be collected from the purchaser of user of the food or accommodation by the person selling such food or furnishing such accommodation. Such person shall pay to the city by the twentieth day (20th) of each month, all collections of the tax for the preceding month, accompanied by reports on forms prescribed by the Commission.
E. The purpose of the use of the funds generated by levy of the Gross Receipts Tax - Lodging and Gross Receipts Tax - Restaurants shall include all purposes authorized by Ark. Code Ann. § 26-75- 606, as may be amended from time to time, and, to the extent permitted by law, for the issuance of bonds pursuant to Ark. Code Ann. § 26-75-608. (Ord. No. ____, § 1)
3.30.04 Creation of Pea Ridge Advertising and Tourism Promotion Commission
A. The City of Pea Ridge, Arkansas, Advertising and Tourism Promotion Commission (the "Commission") is created.
B. The Commission shall be composed of seven (7) members who are electors of the City of Pea Ridge, Arkansas, and whose selection and term shall be approved by the Pea Ridge City Council.
C. Four (4) members of the Commission shall be owners or managers of businesses in the tourism industry, with at least three (3) of these members shall be owners or managers of hotels, motels, or restaurants located within the corporate limits of the City of Pea Ridge, Arkansas.
D. Two (2) members of the Commission shall be members of the Pea Ridge City Council selected by the said Pea Ridge City Council to so serve; provided, however, that in the event that any such person shall cease to be a member of the Pea Ridge City Council, such person shall no longer serve on the Commission and that seat shall be deemed to be vacant and replaced pursuant to the terms of this Section.
E. One (1) Member of the Commission shall be from the general public at large and shall be an elector in the City of Pea Ridge, Arkansas.
F. Selection of the Initial Members of the Commission shall be made pursuant to Ark Code Ann. § 26-75- 605.
1. The four (4) tourism industry positions shall be filled by appointment made by the Pea Ridge City Council for staggered terms so that: (i) one (1) member shall serve for an initial term of one (1) year; (ii) one (1) member shall serve for an initial term of two (2) years; (iii) one (1) member shall serve for an initial term of three (3) years; and (iv) one (1) member shall serve for a term of four (4) years.
2. The at-large position shall be filled by nomination of the Mayor of the City of Pea Ridge and shall be approved by the Pea Ridge City Council. This position shall serve a term of two (2) years.
3. The City Council Members shall serve annual terms.
G. A vacancy will be deemed to exist when a member of the Commission dies or resigns or ceases to possess any of the qualifications for membership, or when a member is removed from the Commission by a vote of a majority of the members of the City Council at a regular meeting of the City Council upon a finding by such majority that such removal is in the best interest of the City Council of the City of Pea Ridge; provided, however, that no City Council member may be removed by the Commission. In the event of a vacancy occurring on the Commission of any of the four (4) tourism industry positions or the at-large position, that vacancy shall be filled by an appointment of the remaining members of the Commission, subject to the approval of the City Council. It shall be filled in the manner heretofore provided, with the member filling the vacancy serving the balance of the term of the former member who created the vacancy. (Ord. No. ____, § 1)
3.30.05 Creation of Pea Ridge Advertising and Tourism Promotion Fund
A. The funds received by the Pea Ridge Advertising and Tourism Promotion Commission, under the provisions or this Ordinance shall be paid into a fund to be known as the Pea Ridge Advertising and Tourism Promotion Fund to be used in the manner set forth herein or as may be permitted by law.
B. All revenues received by the Commission pursuant to this levy shall be deposited by the Commission in such account or accounts as may be designated by the Commission. (Ord. No. ____, § 1)
3.30.06 Penalties and interest for violation of chapter
A. Any person required under this chapter to pay the hotel tax or restaurant tax, or file reports of said tax, who willfully fails to file a report or pay the monthly tax amount owed, shall be guilty of a misdemeanor.
B. In addition to all other powers granted to the Commission pursuant to state law, the Commission shall have full enforcement and collection powers as set forth in Arkansas Code Annotated § 26-75-603, as well as the power to:
1. Assess penalties and interest against taxpayers who fail to timely report or pay the tax. The penalty shall be equal to five percent (5%) of the unpaid tax amount per month not to exceed a total assessment of thirty-five percent (35%) of the unpaid tax. Simple interest on unpaid taxes shall be assessed at the rate of ten percent (10%) per annum;
2. Assess unpaid or unreported tax within three (3) years of the date the tax is due;
3. Provide for judicial relief from proposed assessments in accordance with this section;
4. Issue certificates of indebtedness in accordance with this section.
C. In the administration of the hotel and restaurant tax authorized by this chapter, the Commission for the purpose of determining the accuracy of a report or fixing any liability under such tax provisions, may make an examination or investigation of the place of business, the tangible personal property, computers, equipment, and facilities, and the electronic and physical records, including, but not limited to, books, records, data, reports, papers, vouchers, accounts, and documents, of any taxpayer or other person. Every taxpayer or other person and his agents and employees shall exhibit to the Commission these places and items and facilitate any examination or investigation.
D. The Commission shall give the taxpayer notice of any assessment, demand, decision, or hearing before the Commission which directly involves that taxpayer.
E. All notices required to be given by the Commission to a taxpayer shall be either served by personal service or sent by mail to the taxpayer's last address on record with the Commission. If this mail is returned unclaimed or refused, then proper notice shall have been served and given, and the Commission may take any action permitted by this chapter and by Arkansas Code Annotated § 26-75-603.
F. If any taxpayer fails to file a report and remit the hotel and restaurant tax as provided for by this chapter, the Commission, from any information in its possession or obtainable by it, may determine the correct amount of tax due in accordance with the following procedure:
1. The Commission shall propose the assessment of tax due plus penalties and shall give notice of the proposed assessment to the taxpayer. The notice shall explain the basis for the proposed assessment and shall state that a final assessment shall be made if the taxpayer does not protest such proposed assessment.
2. Any taxpayer who wishes to seek administrative relief from any proposed assessment of taxes shall do so pursuant to the following procedures:
a. A taxpayer may at his option either request the Commission to consider his request for relief solely upon written documents furnished by the taxpayer or upon the written documents and any evidence produced by the taxpayer at a hearing.
b. A taxpayer who requests the Commission to render its decision based on written documents is not entitled by law to any other administrative hearing prior to the commission's rendering of its decision and, if necessary, the issuing of a final assessment and demand for payment or issuing of a certificate of indebtedness.
3. If the taxpayer requests a hearing, the Commission shall set the time and place for hearing and shall give the taxpayer reasonable notice thereof.
4. Within thirty (30) days of the issuance and service on the taxpayer of the notice and demand for payment of a deficiency in tax established by (a) a proposed assessment which is not protested by the taxpayer under this chapter, or (b) a final determination of the Commission following administrative review, the taxpayer may seek judicial relief from the final determination in accordance with Arkansas Code Annotated § 26-75-603(d).
G. If a taxpayer does not timely and properly pursue his remedies seeking relief from a decision of the Commission, and a final assessment is made against the taxpayer, or if the taxpayer fails to pay the deficiency assessed upon notice and demand, then the Commission shall utilize the provisions of Arkansas Code Annotated § 26-75-603(c) to enforce payment in accordance with said provisions.
3.30.07 Injunction
The City Attorney or Prosecutor may, if he deems it necessary, institute an action in the name of the city in a court of competent jurisdiction to compel compliance with or restrain by injunction the violation of any provision of this chapter.
(Ord. No. ___, § 1)."
Section 2: Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or word or this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or adjudication shall not affect the remaining portions of the ordinance which shall remain in full force and effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of the ordinance. It is the legislative intent that this Ordinance shall remain in effect notwithstanding the validity of any part. (Ord. No. ____, § 2)
Section 3: Emergency Clause. Due to the continuous, residential and commercial growth in the city, and potential changes being considered in the legislature, this ordinance is necessary to protect the public peace, health, welfare, and safety; therefore, an emergency is hereby declared, and this ordinance shall be in full force and effect from and after its approval. (Ord. No. ____, § 3)
Section 4: Repeal.
All other laws, ordinances, resolutions, or parts of the same that are inconsistent with the provisions of this ordinance are hereby repealed to the extent of such inconsistency (Ord. No. ____, § 4).
PASSED AND APPROVED this 21st day of February, in the year of our Lord, 2023.
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NATHAN SEE, Mayor
ATTEST:
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SANDY BUTTON, City Recorder