Fayetteville to Consider Extending HMR Tax

The ordinance review committee of the Fayetteville City Council will meet Feb. 21 to consider a proposal to extend the city’s 2 percent hotel/motel/restaurant (HMR) tax to convenience stores, carry-out pizza businesses and grocery store delicatessens.

Currently, the tax applies only to hotels, motels and restaurants that serve food on the premises (restaurants with at least six seats for diners).

The city Advertising and Promotions Commission voted last year to amend the ordinance to include the additional businesses.

Marilyn Johnson, director of convention and visitor development for the Fayetteville Chamber of Commerce, said she didn’t know when the proposal might go before the full City Council for a vote. The Chamber is under contract with the A&P Commission to administer the HMR tax.

Johnson said six takeout pizza chains in the city already pay the HMR tax. Four pizza chains don’t — Eureka Pizza, Domino’s Pizza, Little Caesars and Papa John’s.

With the current HMR tax in place, those who dine in Fayetteville pay 10.125 percent in taxes for restaurant meals. That includes a 5.125 percent state tax, a 2 percent city tax, a 1 percent Washington County tax and the 2 percent HMR tax.

The HMR tax brought in $1.25 million last year. The proceeds are split between advertising and promotions, and city parks. Johnson said she had no way to estimate how much the proposed change in the ordinance would affect annual tax collections.