Mayoral candidate Corbett makes a point: City takes down sign at golf pro shop that he says “flouted” city exemption from charging sales tax

State law exempts local governments from collecting sales tax, including a local-option sales tax, on most items local governments buy or sell.

This is true of merchandise sold at the city of Cedar Rapids' golf course pro shops, though not on the fees to play golf.

What irritates mayoral candidate Ron Corbett, though, is a sales promotion sign that he spotted at the city's Gardner Golf Course pro shop. “Tired of increasing taxes, We don't charge sales tax on all merchandise,” the sign reads.

Firstly, Corbett says the city of Cedar Rapids - which he points out increased property taxes and utility rates and added a new 1-percent franchise fee on electric and gas bills on July 1 and added a 1-percent local-option sales tax on April 1 - shouldn't be asking golfers on a city golf course if they are tired of increasing taxes.

“The city is increasing the taxes, and then they turn around and advertise, ‘Tired of increasing taxes,'” Corbett says. “You don't see the irony there?”

What angers Corbett, though, is that he says the city has been “flouting” its legal tax sales tax exemption when private-sector golf shops must charge the sales tax.

The sales tax in Cedar Rapids and all of Linn County is now 7 percent, 1 percent of which is a local-option sales tax. In Cedar Rapids, 90 percent of the local-option sales tax goes to flood recovery.

“I understand the exemption in state law,” Corbett says. “But I think it's hypocritical to ask local small business to help flood victims (with the local-option sales tax), and then to advertise that the city doesn't have to collect the tax.”

On Tuesday, Julie Sina, the city's director of parks and recreation, said the sales-tax signage at the city's Gardner course now has come down.

“It's creating more of a hassle than a benefit,” she says.

The sign, she adds, had been up just at the city's Gardner course, not the three other cities courses, and she says it went up last golf season, many months before the city imposed a local-option sales tax.

She calls the Gardner sign a “good-faith effort” to inform golfers at Gardner that they can purchase merchandise without paying sales tax. “It's a fact,' she says.

The city's golf courses, Sina notes, need revenue like any other business so they can pay employees and maintain the city's significant investment in public golf courses.

Corbett on Tuesday “congratulated” the city for taking down the “offending” Gardner signage.

He now suggests that the city golf pro shops collect the local-option sales tax anyway and add it to the other sales-tax revenue coming into the city. He also says the city ought to see it can raise more money for the city's golf operation by privatizing the golf course pro shops.

 Sina says the city has been and will continue to follow state law related to the collection of sales tax and the local-option sales tax.

The city, she adds, moved from privately run pro shops to city-run ones over a period of several years in a change that improved the revenue picture for the golf operation. She is not adverse to reviewing the move to see how it is paying off for the city, she says.