NewsApril 8, 1998
Voters approved an expansion of Cape Girardeau's hotel-motel-restaurant tax Tuesday. The measure, which expands the 1 percent restaurant tax to include convenience stores, supermarkets and concession areas of large retail stores and the 3 percent hotel-motel tax to include bed and breakfasts, was approved 1,886 votes to 1,384...

Voters approved an expansion of Cape Girardeau's hotel-motel-restaurant tax Tuesday.

The measure, which expands the 1 percent restaurant tax to include convenience stores, supermarkets and concession areas of large retail stores and the 3 percent hotel-motel tax to include bed and breakfasts, was approved 1,886 votes to 1,384.

Shirley Talley, vice chairman of the city's Convention and Visitors Bureau, which originally proposed expanding the tax, was happy with the results.

"That is wonderful, and I'm really not surprised, because I think our community, when they feel something needs to be corrected or something's not fair, they want to correct it. And I think that was what the whole issue was, we wanted to be fair," Talley said after learning the election results.

She headed a subcommittee that came up with the original draft of the tax expansion.

"It was not an easy task," she said, adding work on the revision began in February 1997.

"We had a lot of meetings. We did a lot of reading. We did research throughout the Midwest about convenience stores and supermarkets and the direction they were going to go in the future and what their delis were going to do," Talley said. "We tried to look down the road to make sure that we covered as much as possible."

CVB advisory board members argued that all businesses which serve prepared, ready-to-eat foods should have to collect the restaurant tax, which is 1 percent on total restaurant receipts.

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At the heart of the debate over the tax expansion was whether convenience stores, supermarkets and other businesses should have to collect the restaurant tax on prepared foods, such as deli sandwiches, fountain sodas and other items.

Owners of those businesses had expressed concern about determining which items were subject to the tax. They said they would pass the 1 percent tax along to consumers.

The tax rates themselves did not increase.

These changes were implemented with the approval of the tax expansion:

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

-- Clarify the definition of food to spell out that prepared foods -- such as pre-made sandwiches, deli items and fountain sodas -- will be subject to the restaurant tax, but grocery items will not.

-- Make caterers who serve more than 100 people collect the 1 percent restaurant tax, and require them to get a restaurant license and city health inspection.

-- Delete the exemption for hotels, motels or bed and breakfasts with fewer than eight guest rooms. All such establishments, regardless of the number of rooms, are now subject to the 3 percent hotel-motel tax.

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

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