One of the most frequent requests that we have heard from restaurants is for the city to find some way to provide relief against the city’s 2% advertising and promotion tax (A&P) that is charged to restaurants and hotels based on sales.
We dug into this at one point earlier this month only to find the A&P was tied to bond payments that had to be repaid, and because of that, the A&P tax could not be dropped.
It seems the Little Rock Convention and Visitors Bureau (LRCVB), the administrators of the A&P tax, have found a way to provide some relief to restaurants during this time. Announced today, the LRCVB will drop the late payment penalty and interest from late payments for A&P tax payments for February-May. Additionally, they are allowing restaurants and hotels to defer their payments for up to 3 months for that same time period.
This is a big relief for some restaurants. Several we talked to had strong months in January, February, and early March only to see the coronavirus shrink their profits by as much as 80%. The tax obligations from the high production months caused a large tax bill in a month when their revenues were at a historical low. This would essentially allow businesses to take the tax requirements from February and early March and spread them out over the slower months due to the virus and lessen the immediate impact until some of the relief options become available.
The full details on the program are below with the official press release.
Little Rock Advertising & Promotion Commission and Little Rock Convention & Visitors Bureau offers flexibility to tax permittees
LITTLE ROCK, Ark. (March 31, 2020) – To address the strains created for local hotels and restaurants by the current COVID-19 pandemic, Little Rock Advertising & Promotion Commission (A&P) and Little Rock Convention & Visitors Bureau (LRCVB) is offering some flexibility in the A&P tax remittance process.
The A&P tax is a legal obligation borne by individual consumers and remitted by permittees, just like state and local sales tax. The Little Rock A&P Tax is legally tied to debt service in the form of municipal bonds. While LRCVB and the Little Rock A&P Commission cannot waive the obligation to remit the tax by lodging and prepared food permittees, they are very sensitive to the fact that local prepared food and beverage retailers as well as lodging retailers are facing extreme challenges.
Little Rock A&P Commission will be offering the following relief options to provide flexibility to permittees related to the A&P taxes. All permittees are expected to continue to file their A&P tax returns each month (even if their gross receipts are substantially less than normal or zero), and have the option to utilize the new temporary relief applications if needed:
- A Covid-19 Application for Relief from Penalty and Interest (available online) for the taxable periods covering February, March, April and May, 2020.
- A Covid-19 Application for Deferment and Installment Payment Agreement (available online) that can defer, for three (3) months, payment due for taxes owed for the taxable periods covering February, March, April and May, 2020.
Permittees may obtain all applications online here: LittleRock.com/tax
If permittees have questions or need more information, they can contact Kasey Summerville at LRCVB (Ksummerville@littlerock.com or 501-370-3317).
The Little Rock Convention & Visitors Bureau (LRCVB) is the official destination marketing organization for the City of Little Rock, charged with marketing and selling the city as a meeting, sports and leisure travel destination. The LRCVB also manages the Statehouse Convention Center, Robinson Center, River Market and multiple parking facilities. The Little Rock Advertising & Promotion Commission is the governing body for LRCVB. For more information, visit www.littlerock.com .