In 2018, Arkansas’ three biggest cities collected a combined $18.7 million in taxes on food orders and hotel stays.
This tax is often called the “hamburger” tax because of its relationship with eating out. In many cities, the tax is also applied to hotel stays.
The Advertising and Promotion Commission Tax, as it is officially known, is levied in addition to what people pay in regular city, county and state sales taxes. But this tax money doesn’t go to fund police, fire and other regular city expenses.
City councils have approved charging this tax to improve area attractions. Some cities use the money to pay for park maintenance. Others use it to lure big conferences, which in turn can generate more sales tax revenue for city budgets.
Unlike regular sales tax, residents don’t vote on whether to levy a hamburger tax. State law allows city councils to vote and pass an ordinance creating this commission and its associated tax.
The commissions are then in charge of collecting and spending the revenue how they see fit. The decisions made and money spent are still public record, and the Advertising and Promotion Commission meetings are public meetings.
This is one way residents can have a voice in what happens with this funding.