The Eureka Springs City Advertising and Promotion Commission is planning legal action against three businesses that the commission says has repeatedly refused to remit the tourism tax they collected.
At the CAPC’s regular monthly meeting held Thursday, Dec. 18, director Mike Maloney told commissioners that three unnamed businesses have been on the delinquent list for so long that taking them to court was a last resort.
“… Three we are pursuing legal action,” Maloney said, adding that legal action meant the CAPC was going to have to “sue them.”
“We have gone through our lawyer on those,” finance director Ty Reed said. “They have sent a process server to them, so we’ve began that process.”
Commissioner David Avanzino said not remitting their tourism tax means a business is committing “tax fraud,” and questioned whether the state could get involved with any penalties or fines.
“That’s a question I’d probably have to go ahead and get counsel on,” Maloney responded. “In talking to our attorney the past week, we had process servers go out and do three process servers, and on one we had discussed the next step and he said: ‘Well, what we’ll have to do is just file a lawsuit and that would be the A&P filing suit against that collector.’ “The question is very good because if they are also failing to comply with state [taxes], the state can really be more aggressive, I understand, in their efforts because they can shut them down, or close them, so the state basically could go ahead and participate, I suppose, in something that would be maybe a dual suit. I don’t know, but our position would be literally to go ahead and file legal lawsuit against it.”
Other commissioners questioned the cost of taking a business to court, with assurances that CAPC could ask a court to order that the businesses pay the commission’s legal fees.
“If I look at the delinquent list, the majority of those delinquents, they do own property,” commissioner Robert Schmid said. “So like, even if in a case of technically, let’s say running away, closing the business and run away, we could put a lien on their property. If that property ever sells in the future… at closure we could collect that money before it actually goes over to a new ownership. I guess we should be still on the safe side, even if something like that happens.”
Avanzino said no one on the CAPC wants any business to be forced to close, but it’s agreed that examples have to be set in situations where delinquencies get as bad as they are for the three businesses.
“I understand the nuances of potentially forcing a business to close,” Avanzino said. “It’s nothing that none of us want to do. However, doing nothing also sets a precedent for every other business in town that, ‘I can get away with it.’ And we cannot deal with that. So, I just want to make it clear: No, I don’t want to see anyone close. It’s unfortunate, however. … This is what has to be done.”
Maloney responded: “It is black and white.”
FINANCIAL REPORT
The CAPC had $1,680,000 in the bank as of the Dec. 18 meeting, Reed told commissioners.
“In November, we had collections of $244,000 with a budget of $230,000,” he said. “Year-to-date collections are $1,940,000 with a budget of $1,944,000. … Total expenses for November were $185,000 with a budget of $191,000, and year-to-date total expenses are $2,404,000 with a budget of $2,427,000. So, we are slightly more negative than we planned to be by about $17,000.”
Reed said October lodging collections were $122,000 compared with $119,000 a year ago and cumulative lodging collections for the year were at $795,000 compared with $833,000 in 2024.
For food and beverage, October brought in $127,000 compared with $131,000 in 2024, Reed said.
“Cumulative for the year we are at $956,000, and last year at $945,000,” Reed said. “We’re about $10,000 over last year at this point for food and beverage …”
NYE PLANS WRAPPING UP Maloney said his staff has been busy with final preparations for the second annual New Year’s Eve Bash with a Splash celebration downtown.
The event, which gets underway at 8:30 p.m. on New Year’s Eve, will be broadcast live on YouTube beginning at 11 p.m., commissioners were told.
“We’ve got really a kind of a cool program with music obviously, we’ve got fire spinners coming back, we also have some aerial acrobatics that will be put in the middle of the street for people,” Maloney said. “Part of the obvious entertainment factor of all this is just all the people that will be in town for the event, having a good time, two great bands, and then the activity that goes along with it. Technically, it’s going to be a very interesting program for us to put together. Because of the challenges that we had last year, we’ve learned a lot, and moving forward with what we think will be a good broadcast for us.”
At a special-called meeting held Monday, Dec. 22, the Eureka Springs City Council approved a resolution allowing for food trucks and vendors to be set up in the temporary entertainment district previously OK’d for the downtown area for the event.
A free trolley service will also be available from 7 p.m. on Dec. 31 to 12:30 a.m. on Jan. 1, commissioners were told.
“They will do regular hours until 5 p.m., take a couple of hours break, and then from 7 to 12:30, it will be free,” CAPC administrative manager Danyelle Harris said. “And what they will do is have two trolleys running between transit main, to the Depot, Planer Hill. That’ll be a steady one. And then the other one will run transit main …. around Passion Play down Magnetic to the train station and then back and around. So, that way it covers that Pine Mountain parking area, and along that route, so that we can spread parking opportunities throughout town. We are very grateful for that cooperation with them.”
The city is funding the free trolley service for the event, Harris said.
A parade will get the event going at 8:30 p.m. on Dec. 31, followed by the first performance from Jenna and the Soul Shakers at 9 p.m. Fire spinners will perform at 9:45 p.m., Jenna and the Soul Shakers return at 10 p.m., followed by the Melonlight Dancers at 10:30 p.m.
Fossils of the Ancient Robots take the stage at 11 p.m., followed by the TV countdown and 10-second countdown just before midnight. The “splash” will happen at the stroke of midnight and the event concludes with the playing of “Auld Lang Syne.”
FUNDING REQUESTS
Two funding requests were approved to close out the year.
With both groups requesting the maximum $5,000, and only $6,288 remaining in the funding request budget, commissioners first had to move $3,712 to the budget to fund the requests.
Once the money was in place, $5,000 was approved for the 21st Annual Carving in the Ozark and Goggles, Gears and Springs, a festival put on by Steampunk Inn Projects. Both events will take place in April.
