By Ray King
The Arkansas Court of Appeals on Wednesday said Circuit Judge Rob Wyatt was correct when he ruled against claims by the Pine Bluff Advertising and Promotion Commission (PBA&P) that Aramark Educational Services LLC (Aramark) owed money for failing to pay the “hamburger tax” on food sold to students at the University of Arkansas at Pine Bluff.
In the order denying the claims, Wyatt said Aramark is exempt from the tax and ordered PBA&P to refund previously paid tax assessments of $316,418.51 and $127,923.67 in 2022.
A city ordinance provides that a 2-percent tax shall be levied on the gross receipts or gross proceeds received by restaurants, cafes, cafeterias and similar businesses for the sale of prepared food and beverages for on or off premises consumption.
PBA&P contended that failed to pay the tax it owed on food sales to UAPB that were resold to students, but Aramark countered by saying that it was exempt because its agreement with UAPB called for it to provide meals to UAPB to resell to its students, faculty, staff and guests.
In 2023, Wyatt granted summary judgment for Aramark, ruling that Aramark was exempt from paying the tax because it sold the meal plans to the university and not to individual students and that with each sale, Aramark transfers title to the meal plan meals to the university and not to students.
In addition to ordering PBA&P to refund the payments Aramark made under protest, plus interest, Wyatt also ordered PBF&A to pay court costs and Aramark’s attorney fees.
