Restaurant Tax’s Future Up In Air

Restaurant Tax’s Future Up In Air

Columbus – Courtesy of The Dispatch

Robert Smith and Harry Sanders – Courtesy photo

The fate of the joint Lowndes/Columbus 2% restaurant tax is currently being hotly debated, as it is due to expire at the end of June. It normally brings in about $2 million per year in tax revenue from restaurants that make over $325,000 per year in prepared food and beverage sales. One of the primary issues that caused the tax’s renewal to die in committee a few weeks ago was the debate over whether the $325K floor should be in there at all; without it, all restaurants would be assessed the tax; another is whether the city of Columbus should simply go ahead and assess its own version of the tax, should the State fail to reinstate it sometime soon. The tax revenue goes primarily to fund tourism, parks and economic development.

“My thing is that if our legislators aren’t going to take out the ($325,000) floor, we’d be crazy to send anything down there that says otherwise,” Columbus Mayor Robert Smith said. “Two-million dollars is at stake here. That’s what we have to remember. So if the only way to get this tax back in place is to have the floor, that’s what we would have to do. If that means the county isn’t a part of it, that’s their decision.”

Should the city move forward with its own tax, it may mean changing how the existing Columbus-Lowndes Convention and Visitors Bureau’s is funded; the new tax, in this case, would provide said funding in lieu of the old one. Mayor Smith remarked that “[W]ith [CVB Executive Director Nancy Carpenter’s] contacts and experience, we’d be foolish not to use that. . . We’d have to do something about the board because if it were to be city only, we’d need a board with [only] city people on it. But as far as running tourism, I still think the CVB is the best way to do it.”

The county, in contrast, wants to remove the “floor” on the tax, but keep it the way it was – a joint county/city tax. Lowndes County Board of Supervisors President Harry Sanders said, “The county has as much interest in tourism as anybody. . . We want to keep it exactly as it is, with the tax in place like it’s always been. … The only difference is taking away the floor because having that floor doesn’t make any sense. That’s been our position all along and I don’t see any reason why it would change.”

As it stands, if the tax is allowed to die later this year, any reinstatements or changes will have to wait until the Legislature reconvenes next January; this would mean losing out on a year or more of tax revenue. While it is theoretically possible to get a short-term, one-year version of the tax added to an upcoming State special session, it seems that it is unlikely that a local tax would be able to get onto the agenda at such a meeting.

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Please click here for a Dispatch editorial on this topic.

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