Food tax appeal will get hearing

The Pine Bluff Advertising and Promotion Commission met Thursday to select a commission member to oversee a hearing officer from among its members to schedule and hear an appeal from Aramark, the food service vendor at the University of Arkansas Pine Bluff, over a tax dispute with the commission.

According to Sheri Storie, director of the commission, Aramark owes the city nearly $350,000 in food and beverage taxes dating back to 2017.

During the 10-minute meeting, held via conference call, none of the commission members voiced a willingness to serve as the hearing officer. Finally, Rosie Pettigrew, the commission chair, agreed to serve.

“I guess it’s something, we took on this role as commissioners knowing there would be other responsibilities,” Pettigrew said. “So, under the circumstances, I guess I’ll go ahead and accept.”

The commissioners voted unanimously to accept Pettigrew as the hearing officer.

Storie told the commission that Jackie Harris, legal counsel for the commission, recommended that the hear

ing be scheduled at least 45 to 60 days out and ideally in November or December.

“Perhaps sometime early in November or December before we get to the holidays might be something for the commission to look at,” she said.

Following the meeting, Storie said the dispute with Aramark dates back to when it first took over the food service contract at UAPB.

“We are saying that they owe tax on the cafeteria they’re operating on the campus,” Storie said. “Aramark is a for-profit entity, but they are saying because they are contracted to UAPB and UAPB is a tax-exempt entity, that they are exempt from the food and beverage tax.”

Storie said, however, that because the cafeteria is operated by Aramark to make a profit, the commission’s position is that the tax exemption does not apply.

She said at issue is a tax assessment of $349,843 in unpaid taxes and penalties dating back three years.

“We have assessed them to owe from the time they took over the food service in July 2017 to the time we sent the letter this past July,” Storie said. “Now Aramark is appealing that.”

Storie said Aramark took over the cafeteria at UAPB in July 2017 from Thompson Hospitality, which she said never questioned the 2 percent food and beverage tax.

“Thompson Hospitality did pay food service on all of their cafeteria sales and also on catering, because the 2 percent tax applies to caterers in the city of Pine Bluff,” she said. Now, it doesn’t apply when they’re catering events for the football team or something like that, but there are times, like when they cater events at the Convention Center, that it does apply.”

Storie said that with the budget constraints forced by the coronavirus pandemic, the commission had to cut its $1.5 million annual budget by some $225,000, or 15%. Although some of that cut was later restored, she said, the amount the commission says is owed by Aramark would help a lot.

“We’re funded by the restaurant and lodging tax, which has been hit the hardest by covid-19,” she said. “So we’ve had to amend our budget this year several times.”

Storie said initially the commission implemented a 15% across-the-board reduction in the amount it contributed to different entities that depend on the advertising and promotion tax for part of their funding, such as the Pine Bluff Convention Center, the Arkansas Railroad Museum and the Arts and Science Center of Southeast Arkansas, as well as cutting some grants for events.

Aramark’s attorney in the matter is Scott Riley of the Cook Riley Law Firm of St. Louis, Mo. Riley did not respond to an email request for comment.

Pettigrew, who as the hearing officer is responsible for scheduling the appeal hearing, said she will select and announce the date at a later time.