BY MELANIE BUCK –
The Mena Advertising and Promotion Commission has implemented a new policy in regards to collection procedures of delinquent and unpaid A&P tax collections. The policy comes in response to several restaurant establishments being in arrears on their tax payments and as well as some lodging establishments have not submitted reports to be billed on.
On March 24, 2003, Mena City Council adopted an ordinance to levy a tax on lodging and restaurant establishments; 3% on hotels and motels, and 1% on restaurants. Since that time, the ordinance has changed slightly, but the percentages have stayed the same.
The purpose of the tax is to promote and develop tourism and increase the flow of tourism dollars to Mena. The Mena Advertising and Promotion Commission (Mena A&P) was created to determine the use of the funds and distribute and spend the funds collected. The funds are meant for the advertising and promotion of the City of Mena and for the construction, reconstruction, repair, maintenance, improvement, equipping, and operation of tourist promotion facilities in the city.
However, in recent months, the Commission has found that several establishments are in arrears and other establishments have never submitted revenue reports so that the tax due could be determined.
In 2015, restaurant tax revenue for Mena A&P were $172,185.00 and lodging tax revenue was $61,047.58. As recorded in the 2015 A&P Tax Revenue Collections document, one restaurant is 60 days in arrears, one 90 days, one for 120 days, one for 180 days, and one for 240 days. It is unknown how much is due from each establishment and with the rising of a new type of lodging establishment, the ‘vacation rental by owner’ category, it has been difficult for commissioners to established who is required to pay.
To aid in collecting unpaid taxes and to clarify for new establishments that may be unclear of the law, the following procedures have been set forth:
- Tax payments are considered late on the last day of the month in which they are due. A penalty equal to 5% of the tax due will be assessed on the 3rd of the following month and every month that follows until the tax is paid. Total assessment of penalties will not exceed 35% of the unpaid tax. Unpaid taxes will also accrue interest at the rate of 10% per year simple interest.
- Statements are sent out by the 5th of every month on overdue taxes. If the Advertising & Promotion Tax Collector has failed to submit tax reports, the amounts shown on these statements will be estimates. These estimates will be based on data available on previous gross earnings reported. Said statements will be sent by regularly mail.
- That after the tax becomes 30 days delinquent, the City Clerk will write a letter to the Advertising & Promotion Tax Collector reminding said party of the obligation to pay tax.
- Once 90 days past due, a letter will be sent out by regular mail. This letter will:
- Explain the basis for the proposed assessment of tax, penalty and interest.
- If applicable include the statement “Final assessment shall be made on this estimate unless you submit information showing otherwise.”
- Serve as notification that a certificate of indebtedness will be filed with the Polk County Circuit Court on the 5th of the following month.
- Said Letter shall inform the Advertising & Promotion Tax Collector of its options of (1) paying the taxes in full or (2) asking for administrative relief by either submitting written documents asking for relief or asking for a hearing to present information and written documents.
- If the tax remains unpaid, the certificate of indebtedness will be filed and a copy of the document will be sent by certified mail to the Advertising & Promotion Tax Collector as a notice of final assessment.
- The Commission will then file a Certificate of Indebtedness from the Deeds and Mortgages records of Polk County, Arkansas.
- That after the tax becomes 120 days delinquent, the commission may request that the Mena City Attorney to issue a misdemeanor warrant for the non-payment of the taxes.