The City of Cadiz is considering legal action against restaurants within the city limits that are not paying the three percent tax.
During Tuesday night’s meeting, Councilmember Susie Hendricks asked City Attorney Allen Wilson if they could pursue such legal action.
Wilson said the city could pursue legal action, and Hendricks added that they need to enter the next steps in that process.
All restaurants in the city limits are required to charge the additional three percent tax that the city hands over to the Cadiz-Trigg County Tourist Commission.
According to City Clerk Susan Hyde, five restaurants are currently delinquent on their restaurant tax payments. Four are one month behind, one is two months behind, and one is 16 months behind. Hyde did not provide the names of those restaurants. The tax is due by the 15th of the following month.
According to city law, restaurants that are behind on tax payments will be charged a penalty of five percent, with a minimum penalty of $25. They will also be charged 12% annual simple interest on the unpaid amount, which is calculated monthly.
The city can also make them pay for any legal costs, including lawyer fees, that the city incurs while trying to collect the debt. In some cases, not paying taxes can be considered a Class A misdemeanor, which could lead to up to 12 months in jail and a fine of up to $500.
