Council Considers Alcohol Sales Tax

City Of Farmington Unanimously Places ‘By-the-drink’ Ordinance On First Reading

FARMINGTON — The City Council unanimously voted Monday to consider whether to collect a 5percent tax on alcohol sales by the drink, though two aldermen said they were against the proposal.

The council placed an ordinance on first reading that would require private establishments licensed by the state to sell alcoholic beverages to apply and pay for a city privilege permit. The proposed ordinance also would levy a 5-percent supplemental tax on the annual gross receipts of these sales.

Farmington became a dry city in 2004 when voters turned down the option to allow stores to sell alcohol.

The local question appeared on the Nov. 2, 2004, general election ballot. Out of 2,228 registered voters, Farmington voted 858 against the sale of alcohol and 762 for the sale of alcohol, a turn-out of 73 percent. The vote prohibited stores, such as convenience stores, gas stations and liquor stores, from selling packaged alcohol and alcohol by the drink within the city limits.

The election results did not completely ban the sale of alcohol in Farmington because a private club or restaurant could apply for a liquor license from the Alcoholic Beverage Control Commission.

The Golf Club at Valley View, which was annexed into Farmington in early 2008, is the only establishment in the city limits that dispenses alcohol drinks to its customers and members.

Aldermen Keith Lipford and Bobby Morgan voted to place the ordinance on first reading Monday night, but both indicated they opposed the measure.

“I’m not for it but I’ll go ahead and say yes,” Lipford said.

Alderman Bobby Morgan made the same comment in casting his vote.

“I don’t think we should punish someone who is already in business in Farmington,” Morgan said after the meeting, referring to the Golf Club at Valley View. “I also think that if it’s on the books, people may not come here.”

Morgan said he received several calls from people at Valley View about the ordinance. No one from the public addressed the council about the proposal Monday night.

Mayor Ernie Penn said the proposed ordinance is the city’s way of being “proactive” to look for other sources of revenue. He noted that it’s possible a motel, hotel or major restaurant could locate to Farmington with the opening of the new sports complex.

“If they ask to sell alcohol, we’d have this extra tax,” Penn said.

He stressed that the ordinance does not change the fact that Farmington is a “dry city” and pointed out any private establishments that want to sell alcoholic beverages would have to first receive a permit from the state.

The eight-page ordinance says that private establishments licensed by the state to sell alcoholic beverages would be required to pay a $50 annual fee for the “privilege of operating a private club” within the city limits (state law allows a city to charge up to $750 for a privilege permit). This privilege permit fee would be in addition to the annual city business license.

The 5-percent sales tax would be levied on the sale of alcoholic beverages on the premises and

tax receipts monthly to the city business manager.

“This is not a liquor store permit,” Penn told the aldermen. “This is strictly liquor by the drink at a private establishment.”

He added, “There may not be anyone (applying) in five years. We may not get any. But that’s going to be a business owner’s decision. It’s not our decision.”

Penn recommended that the council place the ordinance on first reading to allow time for the public to comment about the proposal. The council will next discuss the ordinance at its Feb. 13 meeting.