EXPANSION OF CITY TAX ON TUESDAY'S BALLOT

Cape Girardeau voters will decide in Tuesday's election whether convenience stores, supermarkets and other businesses that sell food should have to collect the city's restaurant tax.

The measure would expand the city's hotel-motel-restaurant tax to cover a number of businesses now exempt from collecting the tax.

In addition to changing who would have to collect the restaurant tax, the measure would also make bed-and-breakfast inns with fewer than eight rooms collect the hotel-motel tax.

The current ordinance exempts establishments with fewer than eight rooms from the tax.

The tax rate -- 1 percent on gross restaurant receipts and 3 percent on gross hotel-motel receipts -- would remain unchanged.

The city's Convention and Visitors Bureau Advisory Board recommended revising the tax. Board members said it was unfair for restaurant owners to have to collect the tax for a sandwich when the same sandwich sold at a convenience store or a supermarket was exempt from the tax.

The current city ordinance essentially defines a restaurant as a business featuring tables and chairs for customers that is primarily engaged in selling prepared foods or meals. That definition leaves out cooked foods available from convenience stores, grocery stores and the concession areas of retail stores, CVB board members pointed out.

The CVB organized a subcommittee to review the collection and wording of the hotel-motel-restaurant tax.

Shirley Talley, who chaired the committee, said the tax wasn't being fairly applied. She said people's eating habits have changed, and more consumers are picking up prepared meals at grocery stores to take home for dinner.

Business owners have indicated they will pass the 1 percent restaurant tax on to consumers. They have also expressed concern about determining which food items are subject to the tax.

Mayor Al Spradling III said the issue of fairness "has been raised over the years probably appropriately so. It isn't going to raise a great deal of money. It's going to be more of an expansion so that everyone is on the same playing field."

City officials estimate expanding the hotel-motel-restaurant tax would bring an additional $45,000 into city coffers annually.

Other changes proposed include making caterers who serve more than 100 people subject to collecting the tax and changing the definition of prepared foods to define what is subject to the tax.

Meals served to patients in hospitals, nursing homes and rehabilitation centers would be exempt from the restaurant tax, as would meals delivered through meals-on-wheels programs.

The measure on Tuesday's ballot would also make individuals or entities exempt from state and federal sales tax -- church, school and governmental groups -- exempt from the hotel-motel-restaurant tax.

The hotel-motel-restaurant tax was imposed in 1984 and is being used to pay off construction bonds for the Show Me Center, the Osage Community Centre and the Shawnee Park Sports Complex. The tax also funds operations of the Convention and Visitors Bureau.

The CVB board began studying the tax when it learned last year that several restaurants had not been collecting the 1 percent tax, some because they had never been notified they were required to.

Hotel-Motel-Restaurant Tax

A proposal on Tuesday's ballot would expand the city's hotel-motel-restaurant tax to include a variety of businesses not covered. The tax rate itself, now 3 percent on gross restaurant receipts and 1 percent on gross hotel receipts, would not increase.

At right are changes in Cape Girardeau's Hotel-Motel-Restaurant Tax that voters will be deciding on.

-- Change the definition of restaurant to include all businesses that sell prepared, ready-to-eat food, including convenience stores, grocery stores that sell deli items and concession areas at major variety stores.

-- Clarify the definition of food to spell out that prepared foods -- such as pre-made sandwiches and fountain sodas -- will be subject to the restaurant tax, whereas grocery items will not. The new definition will help determine which items are subject to the restaurant tax and which are not.

-- Make caterers who serve more than 100 people subject to the restaurant tax, and require them to get a restaurant license and health inspection.

-- Delete the exemption for hotels, motels or bed and breakfast inns with fewer than eight rooms. The change would make all hotels, motels or bed and breakfast inns subject to the hotel-motel tax regardless of the number of rooms.

-- Make all people or entities who are exempt from paying state or federal sales tax exempt from paying the hotel-motel-restaurant tax.