Senate committees kills effort to alter A&P law

One part of a legislative effort to change Arkansas’ Advertising & Promotion law was defeated Wednesday in the Senate Revenue and Tax Committee.

SB 180, sponsored by Sen. Johnny Key, R-Mountain Home, sought to change Arkansas’ Advertising & Promotion laws to require an election to implement hospitality taxes. Existing law affords cities and counties the option of an election or enacting the taxes by ordinance.

By a 4-2 vote against passage, SB 180 failed to get out of the Senate Revenue & Tax Committee. Sen. Jake Files, R-Fort Smith, was one of the four to vote against the bill.

The state’s A&P laws essentially allow for lodging (hotel) taxes and prepared food (restaurant) taxes to support tourism promotion efforts through advertising, marketing, management of convention centers and other activities. Hospitality taxes — hotel and restaurant taxes — must be administered through Advertising and Promotion Commissions that are established by a city or county.

Supporters of Key’s bill claim the process gives local governments too much power in the enactment of the tax, and make it difficult for citizens to reject the tax or call for an election.

Opponents of the bill said the law provides cities and citizens several options to enact or remove the tax. Arkansas tourism officials also say the tax law helps cities and counties support Arkansas’ $3 billion tourism industry.

Turmoil surrounding A&P taxes in Mountain Home, Searcy and Jacksonville is driving the efforts to change the law, said Maryl Koeth, executive director of the Van Buren Advertising and Promotion Commission. In Mountain Home and Searcy, opposition to A&P taxes resulted in voters overturning the tax in a special election.

Koeth, along with representatives of the Arkansas Hospitality Association, the Arkansas Association of Convention & Visitors Bureaus lobbied hard to defeat SB 180 and a companion bill, SB 212.

“The failure of SB180 reinforces the understanding that the Arkansas Constitution of 1874 already ensures the rights of the voters without changing current law,” Koeth said. “That document lays out the process by which the voters can petition to put an issue before the electorate. That process has worked well for over 100 years. It allows voters to handle local issues locally."

SB 212, sponsored by Sen. Jonathan Dismang, R-Beebe, would require a renewal vote on hospitality taxes every four years. The bill has yet to be brought before the Revenue & Tax committee.