By Tracy Overstreet
tracy.overstreet@theindependent.com

Hall County Convention and Visitors Bureau Executive Director Renee Seifert said the city could simply enact a 1-percent occupation tax on the food and beverage industry. That's a tax on all restaurant food and drink.

"It would raise $725,000 a year," Seifert said, showing numbers she obtained Thursday from the Nebraska Department of Revenue. "We could have the $5 million bond paid off in seven years."

The Department of Revenue numbers showed that in 2007, full service restaurants in Grand Island had $52.7 million in net taxable sales.

Limited service restaurants had sales of $14 million, bars had $4.8 million in alcohol sales and caterers netted $1 million in taxable sales.

Those total net taxable sales were $72.5 million in 2007.

Seifert recommended taking caterers out since catering most likely would be served to local diners, but suggested taxing full service and limited service restaurants as well as bars. Those three types of businesses serve just as many, if not more, out-of-town customers as those who live in Grand Island, she said.

"How often do people here go out and eat?" Seifert asked.

She doubted that people would really object to what she classified as a minimal tax, considering the amount of time and money that local people spend eating out.

"The occupation tax on food and beverage would be pennies on the dollar" Seifert said. "On a $100 meal, it's $1. On a $5 meal, it's 5 cents."

Local State Fair bid supporters have expressed concern about taxing local diners and how best to implement such a tax or how to define what is a restaurant.

Seifert said the definition already exists in the Department of Revenue's Standard Industrial Classification (SIC). Businesses paying taxes to the department already have SIC numbers.

The full service restaurants, limited service restaurants and drinking places (bars) could simply be notified of the additional tax, remit it to the state and the city could then recoup the revenue.

Seifert has suggested the food and beverage tax in lieu of an additional tax on local motel and hotel rooms.

A 2-percent lodging tax would raise about $235,000 a year, which would need to be supplemented with keno proceeds, and sales and property taxes in order to finance the $615,000 annual payment on a 10-year, $5 million bond, city officials said.