Local business opposes new tax
Bella Vista’s Advertising and Promotion Commission met earlier this month to discuss how it will operate and select a new name, Discover Bella Vista.
The commission also discussed a process whereby multiple potential logos can be produced and selected, approved a contract for web design and approved bylaws.
During the discussion, issues with collecting the advertising and promotion tax — a 1 percent tax on prepared food and a 2 percent tax on lodging — came up.
The funds collected go to the commission, which functions independently of the city. The money is intended to be used to sponsor events and promote businesses in the city that can draw people to Bella Vista, which may provide additional customers to Bella Vista businesses.
Economic development manager Travis Stephens said the majority of problems with the taxes were honest mistakes — some collected the tax and others were unaware of it or unsure of how to collect it. He suggested not charging a late fee for the first month while everyone gets their bearings.
“What I would say is there is kind of a learning curve to this,” he said during the meeting.
One vendor, he said, chose not to pay in protest.
Matt Schmit, who owns and operates The Main Bite — a breakfast food truck that sits in front of the Artist Retreat Center off U.S. Highway 71 — said he didn’t agree with the tax and didn’t have any intention of paying it — at least not without making it difficult for the city.
It’s not a significant amount of money, he said, but he’s not trying to save a buck so much as he’s trying to send a message. A small amount of something bad, he said, doesn’t make it less bad.
“Quite frankly, it’s not the city’s job to promote my business,” he said. “I can promote my business just fine.”
A business that needs help, he said, should not be in business. Moreover, he said, having another cost to pass on to his customers makes it more difficult to operate in Bella Vista. He’s also worried that that extra degree of difficulty could make Bella Vista a less appealing place for others to open their businesses.
He’s concerned this creates room for corruption — possibly by requiring an employee whose pay may take up a substantial portion of the collected revenue. Keeping business and government separate, he said, is a strong bulwark against that potential corruption.
Schmit said part of the rationale behind establishing this commission is to help in competing with Bentonville and Rogers, which have had similar commissions for several years. He doesn’t believe that has any merit, he said, because those commissions both have a far stronger revenue base that would be impossible for Bella Vista to match. He said he does not believe other cities doing something makes a strong case for Bella Vista to do it.
“We’ve got every city fighting an arms race that doesn’t exist and fueling it with public funds,” he said.
If this is expected to be a moneymaking investment, why couldn’t it come out of normal
city funds? he asked.
“I want to make it an issue for them … I think there need to be repercussions for poor decisions like that,” Schmit said. “I know they’re just trying to find money for the things the city needs (to get) done, but they need to think outside the box.”
Stephens said that this operation can’t be funded by the city’s existing budget and lacking tax base.
In the most recent draft of the 2018 budget, he said, roughly three-quarters of the city’s budget is spread between the police, fire and streets departments, leaving only a quarter of the budget for everything else.
“Discover Bella Vista is going to follow the steps laid out by the state legislature’s guidelines,” he said. “Nobody gets away with not paying taxes, I mean, that’s just a matter of life.”
To start with, he said, the commission will need to file a certificate of indebtedness with the county. This, he said, can put a lien against Schmit’s business, which can prevent him from selling it.
Additionally, he said, until taxes for Schmit’s business are paid, the food truck will not be promoted on the commission’s website or in any of its materials; nor will he be able to sell at any events the commission sponsors.
Bella Vista, he said, is approximately the 40th Arkansan community to add an advertising and promotion commission since the legislation allowing them was passed in the 1970s.
“It’s new to us,” Stephens said, “it’s not new to the state of Arkansas.”
The commission, he said, is not particularly active yet. It’s important to establish a pattern and see what kind of money the tax will actually bring in before making a lot of commitments.
Stephens said he isn’t interested in picking on anyone or pushing any businesses out of town, but the tax is in place and it needs to be collected. He wants to see businesses thrive, he said, and he expects the commission to help.
“We can’t have 28 people paying their taxes and one not,” he said. “He’s a good guy; he’s just got to play by the rules like everyone else.”
"Nobody gets away with not paying taxes, I mean, that’s just a matter of life." Travis Stephens Economic development manager