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Benton City pauses consideration of pull-tab tax increase after business owners urge caution
Summary
Council members agreed to reschedule an ordinance that would raise the city\'s pull-tab (gambling) tax after owners of the town\'s primary pull-tab operation urged a phased approach, saying they began remitting tax voluntarily after prior non‑enforcement and that a sudden change would hurt their small business.
At the April 1 meeting, Benton City Council discussed Ordinance 1073, a proposal to change the city\'s pull-tab tax structure (options raised included 10% of net or 5% of gross under state-authorized limits). After a lengthy public exchange with the owners of the town\'s primary pull-tab operation, the council agreed to reschedule the ordinance to allow staff and council to meet with the owners and analyze net-versus-gross options.
Owners who identified themselves as the operators of the local pull-tab business told the council they voluntarily started remitting the tax after previous non-enforcement and argued a sharp retroactive increase would penalize them. One owner said the business \"started paying that and we've done pretty good\" but warned that raising rates on gross receipts strains operations when payouts and payroll are high. Another owner described multiple cost pressures including minimum-wage increases and rising product costs and said, "we\'re just getting taxed to death." (direct quote attributed to the business owner speaking during public comment).
Council members repeatedly expressed sympathy for the owners\' concerns and emphasized the need to be equitable and reasonable. Several council members suggested a phased increase or smaller incremental steps rather than a one-time jump to the top allowable rate. The council asked staff to meet with the owners to compare the financial impacts of taxing gross receipts versus net revenue and to develop a proposal that balances municipal revenue needs with the viability of a local business.
Action taken: Council moved to reschedule further action on Ordinance 1073 (the transcript records the change as "rescheduled" or deferred rather than adopted or defeated), giving staff and council time to consult the owners and produce fiscal options. The rescheduling means no immediate change to the city\'s current pull-tab rate; amounts currently being remitted were discussed in the meeting as approximately $3,800 per quarter under the existing rate (as stated by a speaker during the meeting). The transcript also records council concern that the city had not enforced collection historically and that increasing rates now after voluntary compliance raises fairness questions.
Next steps: staff and council will meet with the business owners to analyze gross vs. net collection scenarios and return with recommendations for a phased or alternative approach before bringing ordinance language back to the council.
