JONESBORO — Even with some businesses still not paying, Jonesboro’s new 2 percent tax on prepared food sales appears to be producing more revenue than initially projected, the city’s finance department figures show, according to a post from the Jonesboro Sun.
The new “hamburger tax” went into effect on Jan. 1. The money goes to the city’s Advertising and Promotion Commission to finance construction of an indoor sports complex.
The tax was expected to produce about $2.5 million a year. Through April, the tax has brought in $1,265,427. At that rate, the tax could produce almost $3.8 million this year.
At last count, 63 of 330 businesses that are believed to sell prepared foods have not remitted any of the taxes to the city. Mayor Harold Copenhaver said this week his staff has contacted those businesses and many have pledged to correct their accounting process.
“All in all, we’ve had some great cooperation,” Copenhaver said. “…and so there’s only a small number of businesses that are left.” He said some of those businesses are seasonal and only operate during the summer.
The finance department sent letters to the 330 businesses on December 10, after the city council enacted the tax.
Emails were sent to the businesses in January and February, and follow-up phone calls were made in April, according to a report provided by the finance office.
General sales taxes, collected by businesses, are remitted to the Arkansas Department of Finance and Administration. However, Advertising and Promotion taxes must be remitted directly to the cities.
Finance Director Steve Purtee said investment bankers will be monitoring the first several months of collection of the new tax before advising the A&P Commission how to proceed with financing a construction project with the proceeds.
Eastern Sports Management (ESM) of Fredricksburg, Virginia, has been hired to help the community determine the size and location of the complex.
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