CAPC seeking gift shop change

An amendment to the Eureka Springs Municipal Code expanding the definition of "gift shops" in the ordinance regulating the collection of the city's 2 percent gross receipt tax will be discussed by the city council during its meeting Wednesday evening.

Moved from Monday because a majority of council members were attending the annual Governor's Conference, the meeting agenda also includes discussion of the proposed ordinance regarding city festivals, placement of manufactured homes, the auditorium renovation, the outdoor cinema and Sunday market.

The proposed new definition of gift shops is: "any retail establishment a majority of whose gross receipts or gross proceeds are derived from the sale of items commonly referred to as gifts or souvenirs available to tourists.

"These items shall include, but not be limited to: arts and crafts, toys, clothing such as caps and T-shirts, house wares (such as mugs, glasses, plates, etc.), photographs, collectibles, artifacts (both natural and man-made), leather goods, jewelry, home furnishings, imported gift items, candy, books, glassware, toiletries, and all other items available for sale to tourists.

"This ordinance specifically excludes from the tax levy those establishments a majority of whose gross receipts or gross proceeds are derived from the sale of hardware, building materials and fixtures, clothing (except aforementioned clothing), automotive supplies, drugs and health aids, and groceries."

In the preamble to the new definition, the proposed ordinance says:

"it is the intention of the city to fairly, efficiently and rationally apply this gross receipts tax to those businesses which thrive on and benefit from the tourist trade and traffic in the city..."

With the new state sales tax going into effect March 1, the total sales tax now collected by gift shops will be 10.75 percent on gross sales.

That amount includes the city's 2.25 general sales tax, the 2 percent gross sales tax, the county's half a percent sales tax and the state's 6 percent.

The city does not stand to receive additional revenue from the new state 1 cent tax because it is dedicated to public schools.

The 2 percent gross sales tax collected on hotels, motels, restaurants, gift shops, attractions and other tourism-related businesses generates approximately $1.5 mill per year.

The funds are used by the City Advertising and Promotion Commission (CAPC) to advertise and promote the entire city.

CAPC seeking gift shop change

An amendment to the Eureka Springs Municipal Code expanding the definition of "gift shops" in the ordinance regulating the collection of the city's 2 percent gross receipt tax will be discussed by the city council during its meeting Wednesday evening.

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