Change in CAPC collectors delayed

The Eureka Springs City Advertising and Promotion Commission (CAPC) is taking its proposed new definition of "gift shops" back to the discussion table.

Just as the open microphone portion of Monday's City Council meeting was beginning, Alderman Bill Ott moved to take Ordinance 1948, an ordinance amending the current Municipal Code section regarding the definition of "gift shop," off the evening's agenda.

He said CAPC Executive Director LeRoy Gorrell and a member of the commission had asked for a chance to revise the proposal and bring it back to the council.

As proposed, gift shops would be defined as "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."

A large number of business owners attended the March 8 council meeting to protest the changes.

Of the 22 persons who signed up to speak Monday evening, 17 of them addressed the tax issue.

With the new state sales tax that went into effect March 1, the total sales tax now collected by gift shops is 10.75 percent on gross sales.

That amount includes the city's 2.25 general sales tax, the 2 percent (CAPC) 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, collected by 349 businesses.

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

There were several general themes to the opposition remarks Monday:

(1) There are local and regional shoppers who come to Eureka on a regular basis to purchase quality merchandise, not "tourist items or souvenirs." Since these people are not tourists, it is not fair to charge them the tax.

(2) Antique stores should be exempt because "it just isn't done," prices are negotiated and dealers often have to give discounts to make the sales.

(3) Eureka has the highest sales tax rate in the nation and it will drive visitors away when they realize how much sales tax they are paying.

(4) It isn't fair for one business to pay CAPC sales tax when a business in another category can sell the same item without charging the CAPC tax.

CAPC Chairman Steve Roberson defended the commission's attempt to expand the tax collectors' base.

"We did not look at expanding the list because of trying to collect more money," he said. "We have a large reserve and we have had it for two years. We did it because of the complaints from merchants about those who don't collect the tax.

"If there are so many opposed to the whole idea of the CAPC tax, why have they never come to meetings to discuss this?

"I don't believe many of these owners can prove they don't rely on tourists for the majority of their business.

"Why should a handful of businesses be exempt, when there are 349 businesses already collecting the tax?" he asked.

The CAPC has a regular meeting at 2 p.m. Thursday in the jury room of the City Hall.

City council allows wine for Willie's concert

The Eureka Springs City Council adopted a "one-time" ordinance Monday night to allow open containers of alcohol in the City Auditorium for the Willie Nelson concert Friday evening.

Change in CAPC collectors delayed

The Eureka Springs City Advertising and Promotion Commission (CAPC) is taking its proposed new definition of "gift shops" back to the discussion table.

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