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Why you may see a hospitality tax on your restaurant receipts

Some Arkansans have been frustrated to see an additional tax on their receipts when they go out to eat— but are people actually paying more?

ARKANSAS, USA — Taxes, aren't not something you always want to pay— but rather something cities need.

Recently some Arkansans have been frustrated to see an additional tax listed on their receipts when they go out to eat. Does this mean you actually paying more?

If you go out to eat, you'll often see your subtotal, and the taxes added on.

Though some diners in North Little Rock have been seeing receipts with another line for a hospitality tax.

One diner told us, "I looked at the receipt and I saw this hospitality tax, I want to know what it is. What is it?"

That's a question a lot of diners in North Little Rock have asked.

If you're getting your food to go, what exactly is a hospitality tax for? and where does it go? 

Some of it helps fund the North Little Rock tourism office that is run by President Karen Trevino.

"The city of North Little Rock has a 3% food service tax. A lot of people call it a hamburger tax or a hospitality tax or some other kind of tax. But the official name is advertising and promotion," Trevino described.

The 3% tax generates about 7 million dollars a year which is mostly for North Little Rock parks.

"The prepared food, locals and visitors pay that tax when they eat out. And so we felt like with the parks department being for visitors and for residents, that that that was a good, good balance there," Trevino added.

So it is a real tax, and Trevino said it's actually been around for decades.

Many places in North Little Rock— like Capeo— include it in the all-encompassing "tax" line of your receipt.

"I think it's up to the restaurant, it's like if they want to itemize it out, it lets people know more where their taxes are actually going to... but for our purpose... We just have the tax rate. " Capeo CFO, Brian Isaac said.

While no one likes to pay more taxes— Isaac explained that it's worth it

"We love being down here in Argenta and the commission does a great job of promoting events down here. So it really justifies paying the tax," Isaac added.

If you ever see anything like 'covid relief' or 'supply increase fee' Trevino explained that has nothing to do with the city

"If they're just doing this on their own, and they're adding a service fee or, you know, some other fee to offset the inflation, right? That is that's not a tax," Trevino explained.

Isaac said that Capeo did have to increase their prices due to inflation, but they have no extra fees and nothing's changed with your taxes.

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