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Bureau to modify food tax

The Fargo Moorhead Convention and Visitor's Bureau may revise its recent proposal for a half-cent restaurant food tax in Fargo, requesting a quarter-cent tax instead.

The Fargo Moorhead Convention and Visitor's Bureau may revise its recent proposal for a half-cent restaurant food tax in Fargo, requesting a quarter-cent tax instead.

The CVB also may ask Fargo city commissioners to approve the tax for just 10 years, instead of indefinitely.

If the food tax is still needed after a decade to boost tourism in the F-M area, the CVB would have to go back to the commission and show that the tax revenue yielded results.

By doing this, the CVB ensures accountability, said board member Bob Hoss, president of Artco Promotional Products.

Both possible compromises, discussed at a special board of directors meeting Wednesday, are an attempt by the CVB to address concerns about accountability and use of public money.

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A quarter-cent tax would generate about $450,000 per year. On a $20 meal, that would be an additional 5 cents. The tax wouldn't apply to grocery food sales.

No official decision was made Wednesday since four of the nine board members were absent. They'll meet again Feb. 20 and likely will go back to the Fargo City Commission March 17 with a modified proposal.

After much discussion last month, city commissioners tabled the issue so more information could be gathered and so City Attorney Garylle Stewart could research whether this tax would require a public vote, as some have suggested.

So far, Stewart said his opinion hasn't changed -- the City Commission should be able to make the decision without a public vote since the food tax is not like an overall sales tax.

Fargo's Home Rule Charter says any new sales or use tax must be approved by 60 percent of voters.

Concerns also have been raised about how the CVB spends its money now and how more money would be used in the future.

There are people who think this would somehow be CVB Executive Director Cole Carley's personal budget, said Doug Anselmin, board member and Fargo Holiday Inn general manager.

Revenue from the proposed tax would more than double the CVB's current $823,180 annual budget, which comes almost entirely from the Fargo-Moorhead lodging tax.

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CVB purchases and the annual budget are reviewed and approved by the board, Anselmin said.

Carley said he's not sure what more the CVB can do to prove it's accountable.

Most board members Wednesday were in favor of shrinking their tax request.

Only Anselmin said he is leery of backing off the half-cent, since a handful of other cities in North Dakota have chosen to impose the full one-cent food and/ or alcohol tax as allowed by state law.

Also, other CVB's in the region such as Rochester and Duluth, Minn., and Bismarck have larger budgets than Fargo, Carley said.

Board members agreed that some additional tax revenue is necessary for the CVB to remain competitive in its marketing of the F-M area.

"It's worth fighting for," Carley said.

Readers can reach Forum reporter Mary Jo Almquist at (701) 241-5531

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