Fayetteville HMR sales tax report: December 2012

Fayetteville’s hotel, motel and restaurant (HMR) tax receipts saw another increase last month.

A&P receipts reported in December were $208,518, a 3.2 percent increase over the same month in 2011.

Overall 2012 A&P receipts ended at $2,522,008, a 9.7 percent increase over the previous year.

“It was another successful year,” said Marilyn Heifner, the commission’s executive director. “I think anybody in the state would be glad to have an almost 10 percent increase in their HMR collections this year.”

With each participating city collecting different amounts – some for lodging only – it’s difficult to compare HMR revenues throughout the state or region. Bentonville, which collects a 2 percent tax on hotel and motel stays and 1 percent on food purchases, saw a 4.5 percent total increase from 2011 to 2012. Rogers, which also collects a 2 percent lodging tax, but no extra restaurant tax, saw a 12.2 percent increase on the year.

Fayetteville collects 2 percent from hotel, motel and restaurants, but only half of the money goes to the A&P Commission. The other 1 percent is given to the city’s Parks and Recreation Department.

Below is a graph showing 2012 vs. 2011 numbers and a table representing A&P revenues from the HMR tax for the past five years in Fayetteville.

Note: The figures discussed in this post reflect the A&P Commission’s half of the 2 percent tax on hotel and motel stays and food purchases in restaurants. The December report represents November sales.

A&P Funds

Legislation created the Advertising and Promotion Commission in 1977 with the passage of the Hotel, Motel, Restaurant (HMR) tax in Fayetteville. The 2 percent tax is split equally between the city’s Parks and Recreation Department and the A&P Commission. The parks money is used for parks maintenance, operations and for capital improvements. The self-reported numbers do not include retail or liquor sales.

» See recent collection totals

By state legislation, all HMR funds shall be used:
1. for advertising and promoting the city and its environs
2. for the construction, reconstruction, equipment, improvement, maintenance, repair, and operation of a convention center
3. for the operation of tourist promotion facilities in the city
4. for personnel and agencies necessary to conduct the business of the A & P commission

HMR funds can also be used for:
1. for funding the arts
2. for operation of tourist-oriented facilities
3. for construction, reconstruction, repair, maintenance, improvement, equipping and operation of public recreation facilities and for the payment of bonds.

Taxes shall not be used for:
1. general capital improvements within the city
2. costs associated with general operation of the city
3. general subsidy of any civic group or chamber of commerce

Source: Arkansas Code / § 26-75-606 – Use of funds collected