CITY OF TEXARKANA, AR
REQUEST FOR BOARD ACTION
AGENDA TITLE: Adopt an Ordinance to provide for procedures for the enforcement and collection of Advertising and Promotion Commission taxes levied and administered by the City. (A&P) (This ordinance is sponsored by Director Linda Teeters.)
AGENDA DATE: 08/20/2018
DATE SUBMITTED: 08/09/2018
PREPARED BY: TyRhonda Henderson
SUBJECT: City of Texarkana, Arkansas A&P Gross Receipts Tax Collection and Enforcement
EXPENSE REQUIRED: 0.00
AMOUNT BUDGETED: 0.00
APPROPRIATION REQUIRED: 0.00
SUMMARY: The purpose of this ordinance is to provide procedures for the enforcement and collection of A&P taxes levied and administered by the City. The procedures for collection are as follows:
BOARD ACTION: The City Manager and staff recommend approval.
EMERGENCY CLAUSE: None Needed
ORDINANCE NO. ________
AN ORDINANCE TO PROVIDE FOR THE ENFORCEMENT AND COLLECTION OF TAXES LEVIED BY THE CITY UPON THE GROSS RECEIPTS OR GROSS PROCEEDS DERIVED FROM RENTING, LEASING, OR OTHERWISE FURNISHING HOTELS AND MOTELS FOR PROFIT IN THE CITY AND UPON THE GROSS RECEIPTS OR FROM PROCEEDS RECEIVED BY RESTAURANTS, CAFES, CAFETERIAS, AND SIMILAR BUSINESSES FROM THE SALE OF PREPARED FOOD AND BEVERAGES FROM ON OR OFF PREMISES CONSUMPTION, PRESCRIBING OTHER MATTERS PERTAINING THERETO; AND FOR OTHER PURPOSES
WHEREAS, pursuant to Act 185 of 1965, and as subsequently amended, the City of Texarkana, Arkansas, (the “City”) has adopted ordinances levying taxes upon the gross receipts from the renting, leasing, or otherwise furnishing of hotels and motels for profit in the City and upon the gross receipts of restaurant, cafes, cafeterias and similar businesses as defined by the levying ordinance from the sale of prepared food for consumption on and off the premises of such establishment in the City and providing for other matters; and
WHEREAS, the City desires to establish procedures for the collection and enforcement of said taxes that have been levied and administered by the City in accordance with the Code of Ordinances of the City of Texarkana, Arkansas, and pursuant to Act 185 of 1965, and as subsequently amended.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY BOARD OF THE CITY OF TEXARKANA, ARKANSAS:
Section 1. The Code of Ordinances of the City of Texarkana, Arkansas, is hereby amended to include the following as Section 25-22.:
Sec. 25-22. – A&P Gross receipts Tax Collection and Enforcement
(1) Title, Purpose
a) This Ordinance shall be known and may be cited as the City of Texarkana, Arkansas, A&P Gross Receipts Tax Collection and Enforcement Ordinance.
b) The purpose of this Ordinance is to provide the procedures for the enforcement and collection of the taxes levied and administered by the City in accordance with the Code of Ordinances of the City of Texarkana, Arkansas, and pursuant at Act 185 of 1965, and as subsequently amended.
(2) Applications of ordinances and construction with other laws
The provisions of this ordinance shall be cumulative to the Arkansas Gross Receipts Acts of 1941, A.C.A. §26-52-101 et. seq. and the Arkansas Tax Procedure Act §26-18-101, et. seq., the provisions of which so far as practicable, shall be deemed incorporated herein as applicable with respect to the enforcement and collection of the A&P tax. Further, this ordinance shall be in addition to any other right or remedy that may now or hereafter be available concerning or relating to enforcement and collection of the A&P tax.
The following word, and phrases, except where the context clearly indicates the application of different meaning, when used in this ordinance shall have the following meanings:
a) “A&P Tax” means the gross receipts tax levied by the City pursuant to Act 185 of 1965 and as subsequently amended.
b) “Assessment” means a tax is assessed when it is recorded as the liability of a Taxpayer on the Commission’s records. The assessment becomes a first assessment following the decision of the Commission or a hearing officer, if the assessment is protested.
c) “Business Agent” means the designated agent of the Commission in charge of its books, accounts, and financial affairs and is authorized to act on their behalf of the Commission in the performance of its duties.
d) “Business Entity” means a corporation, associated partnership, joint venture, limited liability company, limited liability partnership trust or other legal business entity.
e) “Commission” means the City Advertising and Promotion Commission of Texarkana, Arkansas, and any representative designated by the Commission to perform any function hereunder.
f) “Commission Offices” means the address and offices designated by the Commission as its official place of business.
g) “City” means the City of Texarkana, Arkansas.
h) “Delinquency date” means the A&P Tax is delinquent and subject to penalty on the first day of the month following the month it was due.
i) “Due date” means the A&P tax is due and payable on the twentieth day of each calendar month following the month the tax is imposed on gross receipts.
j) “Person” means any natural person, firm, corporation or other Business Entity.
k) “Taxpayer” means any person liable to remit the A&P Tax.
l) “Hearing Officer” means an A&P Commissioner designated by the Commission to conduct hearings on behalf of the Commission.
(4) Administration and Regulations
The administration of this ordinance is vested in the Commission and the Commission shall promulgate rules and regulations and prescribe all forms as are necessary or required for the enforcement and collection of the A&P tax. The Commission and the Commission alone is charged with collecting the A&P tax. Nothing in this ordinance shall be interpreted as giving the City of Texarkana, Arkansas, any liability for the collection of the A&P Tax. The City of Texarkana, Arkansas, may be responsible for administrative duties for the Commission, but at no time does the City of Texarkana, Arkansas, its employees or agents, have any duties beyond those administrative duties.
(5) Documents to be Provided – Payments of A&P Tax
a) The A&P Tax shall be due and payable on the twentieth (20th) day of each following calendar month by the person liable for the payment of the A&P Tax (Taxpayer) and shall be deemed delinquent if not paid on the first day of the next calendar month.
b) It shall be the duty of the Taxpayers on or before the twentieth (20th) day of each calendar month to deliver to the Commission the forms required to be provided by the A&P Commission. Those forms shall be remitted with the tax payment.
c) If not paid on or before the twentieth (20th) day of the calendar month, the full amount of the A&P tax shall be due from that date; provided, however, no penalty for delinquency shall be assessed if payment thereof is made on or before the Delinquency Date or the first day of the calendar month next following.
d) Whenever a Taxpayer fails to pay the A&P tax by the first day of the calendar month next following, the Commission shall give Notice of a proposed assessment due.
e) Within thirty (30) days after service of notice of the proposed assessment, the Taxpayer may file with the Commission a written protest under oath, signed by himself or his authorized agent, setting forth the Taxpayer’s reasons for opposing the proposed assessment and requesting a hearing.
(6) Hearing on proposed assessments
a) (1) A Commissioner shall serve as a hearing officer to review all written protests submitted by Taxpayers, hold all hearings, and make written findings as to the applicability of proposed assessments.
(2) Decisions of the hearing officer shall be final unless revised by the Commission.
(3) The hearing on written and oral protests and determinations made by the hearing officer shall not be subject to the provisions of the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
b) The actual hearing of the written protest shall be held in the Commission’s Offices or other location set forth in the notice thereof to the Taxpayer.
c) (1) The hearing officer shall set the time and place for the hearing on the written protest; and shall give the Taxpayer reasonable notice thereof.
(2) At the hearing the Taxpayer may be represented by an authorized representative and may present evidence in support of his position.
(3) After the hearing officer shall render his decision in writing and shall serve copies upon both the Taxpayer and the Commission.
(4) (A) If the proposed assessment is sustained, in whole or part, the Taxpayer may request in writing, within twenty (20) days of the mailing of the decision, that the Commission revise the decision of the hearing officer.
(B) If the Commission refuses to make a revision or if the Taxpayer does not make a request for revision, then a final assessment shall be made upon the determination of the hearing officer or the Commission.
(C) A Taxpayer may seek relief from the final decision of the hearing officer or the Commission on a final assessment of a tax deficiency by following the procedure set forth in Section 7.
(7) Judicial Relief
a) Within thirty (30) days after the issuance and service on the Taxpayer of the notice and demand for payment of a deficiency in tax established by a final determination of the hearing officer or the Commission, Taxpayer may seek judicial relief from the final determination by either:
(1) Within one (1) year of the date of the final assessment, paying the amount of the A&P tax due, including any interest or penalties, for any taxable period or periods covered by the final assessment and filing suit to recover that amount within one (1) year of the date of payment. The Commission may proceed with collection activities including the filing of a certificate of indebtedness as authorized hereunder, within thirty (30) days of the issuance of the final assessment for any assessed but unpaid A&P Taxes, penalties, or interest owed by the Taxpayer for other taxable periods covered by the final assessment, while the suit for refund is being pursued by Taxpayer for other taxable periods covered by the final assessment; or
(2) (A) Within thirty (30) days of the issuance and service on the Taxpayer of the notice and demand for payments, filing with the Commission a bond in double the amount of the tax deficiency due, and by filing suit within (30) days thereafter to stay the effect of the Commission’s determination.
(B) The bond shall be subject to the condition that the Taxpayer shall file suit within “thirty” (30) days after the filing of the bond, shall faithfully and diligently prosecute the suit to a final determination, and shall pay any deficiency found by the court to be due and any court cost assessed against him.
(C) A Taxpayer’s failure to file suit, diligently prosecute the suit, or pay any tax deficiency and court costs, as required by subsection (a) of this section, shall result in the forfeiture of the bond in the amount of the assessment and assessed court costs.
b) Jurisdiction for a suit to contest a determination of the Commission under this section shall be in the Circuit Court of Miller County, where the matter shall be tried de novo.
c) The method provided in this section shall be the sole alternative methods for seeking relief from a written decision of the Commission or hearing officer establishing a deficiency in the A&P Tax. No injunction shall issue to stay proceedings for assessment or collection of any A&P Taxes.
d) In any court proceedings under this section the prevailing party may be awarded a judgment for court costs.
(8) Additional penalties and tax
If the Taxpayer fails to comply with provisions of this ordinance, then the following penalties and additions to the tax shall be applicable:
a) In the case of the Taxpayer’s failure to provide documents required by the Commission and pay the tax due on or before the delinquency date, determined with regard to any extension of time for filing thereof, unless it is shown that the failure is due to reasonable cause and not to willful neglect, there shall be added to the amount required to be shown as tax on A&P tax return five percent (5%) of the A&P tax if the failure is not more than (1) one month past the delinquency date, with an additional five percent (5%) for each additional month or fraction thereof during which the failure continues, not to exceed thirty-five percent (35%) in the aggregate.
b) In addition to any penalty assessed hereunder, simple interest on any paid A&P tax shall be assessed at the rate of ten percent (10%) per annum from the Delinquency Date.
(9) Time limitations for assessments, collection, refunds and prosecution
a) Except as otherwise provided in this Ordinance, no assessment of the A&P Tax shall be made after the expiration of three (3) years from the date the return was required to be filed or the date the return was filed, whichever period expired later. The Commission shall not begin court proceedings after the expiration of the three-year period unless there has been a previous assessment for the collection of the tax.
b) Upon written agreement of the Commission and the Taxpayer, the time within which the Commission may make a final assessment, as provided herein, may be extended to a date mutually agreed upon in the written agreement.
c) Where, before the expiration of the time prescribed for the assessment of the tax or of the extensions thereof, both the Commission and the Taxpayer have consented in writing to an assessment after that time, the A&P Tax may be assessed at any time prior to the expiration of the time agreed upon.
d) In the case of fraudulent forms submitted to the Commission or a failure to provide the forms required by the Commission, the Commission may compute, determine, and assess the estimated amount of A&P Tax due from any information in its possession or take the previous six-month average of gross receipts to determine the tax amount owed.
e) Whenever a Taxpayer requests an extension of time for filing any return required hereunder, the limitation of time for assessing any tax shall be extended for a like period.
f) Where the assessment of the A&P Tax has been made within the period of limitation properly applicable thereto, the A&P Tax may be collected by levy or proceedings in court, but only if the levy is made or the proceeding is begun within ten (10) years after the date of the assessment of the tax.
(10) Notice requirements
a) (1) The Commission shall give a Taxpayer notice of any assessment, demand, decision, or hearing before the Commission or its designated representative which directly involves that Taxpayer.
(2) All notices required to be given by the Commission to a Taxpayer shall be either served by personal service or sent by mail to the Taxpayer’s last address on record with the Commission. If this mail is returned, unclaimed or refused, then proper notice shall have been served and given, and the Commission may take any action permitted by this Ordinance or otherwise by law.
(3) All notices of final assessment hereunder shall be sent by certified mail, return receipt requested.
b) The Taxpayer, when giving notice to the Commission shall give notice either by mail or by personal service on the Commission. The notice the Taxpayer gives shall be effective when postmarked or, in the case of personal service, when so served.
c) The Commission and any Taxpayer may, by written agreement, provide for any other reasonable means of giving notice.
d) All notice shall be in writing.
(11) Assessment and collection of taxes generally
a) (1) The Commission or its designated representatives are authorized and required to make determinations and assessments of the A&P Tax, including interest, additions to taxes and assessable penalties, imposed hereby.
(2) The assessment shall be made by recording the liability of the Taxpayer in the offices of the Commission in accordance with rules and regulation prescribed by the Commission.
(3) Upon request of the Taxpayer, the Commission shall furnish the Taxpayer a copy of the record of the assessment.
b) (1) The Commission shall collect all A&P taxes imposed by law.
(2) As soon as practicable after the making of assessment of the A&P Tax, the Commission shall give notice to each person liable for the unpaid tax, stating the amount and demanding payment within ten (10) days.
(3) Upon receipt of notice and demand from the Commission, the person liable for the tax shall pay the stated amount including any interest, additions to tax, and assessable penalties at the place and time stated in the notice and demand.
(12) Proposed assessments
a) (1) If any Taxpayer fails to file forms required by the Commission, the Commission from any information in its possession or obtainable by it, may determine the correct amount of tax for the taxable period by taking the average gross receipts from the previous six-month period.
(2) When no applicable forms have been filed and the Commission determines that there is an A&P tax due for the taxable period, the Commission shall propose the assessment of additional tax plus penalties, as the case may be, and shall give notice of the proposed assessment and shall state the final assessment, as provided herein, will be made if the Taxpayer does not protest the proposed assessment as provided hereby. The Taxpayer does not have to protest the proposed assessment to later be entitled to exercise the right to seek a judicial review of the assessment.
b) Any demand for additional payment of the A&P Tax which is made as the result of a verification of a mathematical error on the return shall not be deemed to be a proposed assessment under the provision of this section and shall not be subject to the hearing or appeal provisions of this Section.
(13) Taxpayer relief
a) Any Taxpayer who wishes to seek administrative relief from any proposed assessment of taxes or proposed notice of disallowance of a claim for refund by the Commission shall follow procedure provided by this section.
b) (1) A Taxpayer may at his option either request the Commission to consider his request for relief solely upon written documents furnished by the Taxpayer or upon the written documents and any evidence produced by the Taxpayer at a hearing.
(2) A Taxpayer who requests the Commission to render its decision
Based on written documents is not entitled by law to any other administrative hearing prior to the Commission’s rendering of its decision and, if necessary, the issuing of a final assessment and demand for payment or issuing of a certificate of indebtedness.
c) Within thirty (30) days after service of notice of the proposed assessment, the Taxpayer may file with the Commission a written protest under oath, signed by himself or his authorized agent, setting forth the Taxpayer’s reasons for opposing the proposed assessment.
d) If the Taxpayer does not file a written protest with the Commission, the proposed assessment shall become final at the expiration of thirty (30) days after receipt of the proposed assessment.
e) The Commission may, in its discretion extend the time for filing a protest for any period of time not to exceed an additional ninety-day period.
(14) Issuance of certificate of indebtedness and exception
a) (1) (A) If a Taxpayer does not timely and properly pursue his remedies seeking relief from a decision of the Commission or hearing officer and a final assessment is made against the Taxpayer, or if the Taxpayer fails to pay the deficiency assessed upon notice and demand, then the Commission through its authorized representative shall, as soon as practicable thereafter, issue to the circuit clerk of any county of the state in which the Taxpayer’s business is located a certificate of indebtedness certifying that the person named therein is indebted to the Commission for the amount of the tax established by the Commission as due.
(B) If a Taxpayer has a delinquent A&P Tax liability to the Commission of less than one thousand dollars ($1,000.00), the Commission or its hearing officer may enter into an agreement with the Taxpayer to allow the Taxpayer to pay the delinquency in installments. The Commission or its hearing officer may choose not to issue a certificate of indebtedness during the period of the installment agreement if he determines that it is in the best interest of the Commission.
(2) The circuit clerk shall enter immediately upon the circuit court judgment docket:
(A) The name of the delinquent Taxpayer;
(B) The amount certified as being due;
(C) The name of the tax; and
(D) The date of entry upon the judgment docket.
(3) (A) The entry of the certificate of indebtedness shall have the same force and effect as the entry of a judgment rendered by the circuit court. This entry shall constitute the Commission lien upon the title of any real and personal property of the Taxpayers in the county where the certificate of indebtedness is recorded.
(B) This lien is in addition to any other lien existing in favor of the Commission to secure payment of taxes, applicable interest, penalties, and costs. The lien is superior to other liens of any type or character attaching to the property after the date of entry of the certificate of indebtedness on the judgment docket. The lien is superior to all claims of unsecured creditors.
(C) The certificate of indebtedness authorized by this subsection shall continue in force for ten (10) years from the date of recording and shall automatically expire after the ten-year period has run. Actions on the lien on the certificate of indebtedness shall be commenced within ten (10) years after the date of recording of the certificate, and not afterward.
b) (1) After entry of certificate, the circuit clerk shall issue a writ of execution directed to the Commission, authorizing the Commission to levy upon and against all real and personal property of the Taxpayer.
(2) The Commission shall have all remedies and may take all proceedings for the collection of the tax which may be taken for the recovery of a judgment at law.
(3) The writ may be issued, served, and executed in the same manner as provided for in the issuance and service of executions rendered by the circuit courts of this state, except the Commission shall act in the place of county sheriffs.
(4) The Commission shall have this authority for all liens either presently filed or filed after the passage of this ordinance.
c) (1) Nothing in this chapter shall preclude the Commission from resorting to any other means provided by law for collecting delinquent taxes.
(2) The issuance of a certificate of indebtedness, entry by the Clerk and levy of execution as provided in this section shall not constitute an election of remedies with respect to the collection of the tax.
(3) The taxes, fees, interest, and penalties imposed or levied hereby may be collected in the same way as a personal debt of the Taxpayer.
(4) The Commission may sue to the same effect and extent as for the enforcement of a right of action for debt.
(5) All provisional remedies available in these actions are available to the Commission in the enforcement of the payment of the A&P Tax.
d) The Commission may contract with persons inside or outside the state to help the Commission collect delinquencies of resident or nonresident Taxpayers.
(15) Settlement or compromise of liability controversies
a) The Commission may enter into an agreement to compound, settle, or compromise any controversy relating to the A&P Tax when:
(1) The controversy is over the amount of tax due; or
(2) The inability to pay results from the insolvency of the Taxpayer.
b) The Commission has the authority to settle any debt for taxes owed, including payment plans for Taxpayers who owe past due taxes.
c) The Commission may waive or remit the interest or penalty, or any portion thereof, ordinarily accruing because of a Taxpayer’s failure to pay the A&P Tax within the statutory period allowed for its payment:
(1) If the Taxpayer’s failure to pay the tax is satisfactorily explained to the Commission; or
(2) If the failure results from a mistake by the Taxpayer of either the law or the facts subjecting him to such tax; or
(3) If the inability to pay the interest or penalty results from the insolvency or bankruptcy of the Taxpayer.
d) In settling or compromising any controversy relating to the liability of a person for the A&P Tax for my taxable period, the Commission is authorized to enter into a written closing agreement concerning the liability.
e) The Commission shall promulgate rules and regulations establishing guidelines for determining whether a proposed offer of compromise is adequate and acceptable to resolve a tax dispute.
(16) Release of Property from Lien
a) Upon written application by any person, the Commission may release any property from the lien imposed by any assessment, order, judgment, or certificate of indebtedness obtained by or from any levy made by it if:
(1) Either full payment is made to the Commission of the sum it considers adequate consideration for the release; or
(2) Adequate security deposit is made with the Commission to secure payment of the debt evidenced by the lien
b) When the Commission determines that its assessment certificate of indebtedness or judgment is clouding the title of property because of error in the description of properties or similarity in names, the Commission may issue a release without the payment of any consideration.
c) The Commission’s release shall be given under its seal and filed in the office of the circuit clerk in the county in which the lien is filed, or it shall be recorded in any office which conveyances of real estate may be recorded.
The provisions of this Ordinance are hereby declared to be severable. If any provision shall be held to be invalid or to be inapplicable to any persons or circumstances, such invalidity or inapplicability shall not affect the remainder of the provisions of this ordinance.
PASSED AND APPROVED this 20th day of August, 2018.
Ruth Penney Bell, Mayor
Heather Soyars, City Clerk
George M. Matteson, City Attorney