This post is all wrong. I used Land Transfer Tax reciepts not Prepared Food tax receipts. Thanks to those who questioned my numbers

Reading Russ (Russ's Outer Banks Journal) and Ray (Eye on Dare) debating the impact and equity of Dare County's Prepared Meals tax got me wondering what the impact of our economic downturn has been on restaurant revenues. We hear from the Outer Banks Visitors Bureau that vistors are still coming but the meals tax revenue tells a different story. Collections have dropped dramatically from a high of $15,186,779 in FY 04-05 to a mere $4,029,807 last year with little relief in site.
The chart above provides graphic proof of the downward trend. The bars are monthly collections and the red line is a rolling 3 month average that smooths out the collection peaks and provides a better seasonal trend line.
What this says is that everyone - tourists and locals alike are spending a lot less money on eating out and that means a lot less money in the pockets of all the wait staff and kitchen staff not to mention restaurant operators. I suspect that restaurant spending is mirrored in souvenir spending. The food tax numbers are much easier to extrapolate the the sales tax numbers that include so many different types of goods.
Russ and Ray had different takes on the impact of this tax on locals. Ray saying pointing out that locals paid it along with our guests while Russ points out that the actual amount of the tax on each meal is immaterial. Actually both are right and I will show you how.
Russ already demonstrated that $1 tax on a $100 dinner probably is not the deciding factor in most peoples minds. I know that my choice of a large coffee as opposed to the double mochachino that Russ drinks isn't based in the 3 cents tax savings. However locals do eat out. wander into Mama Kwans or Island Pizzaria or the Bubba's Bar B Que and you will see your friends and neighbors, more now than in the summer but every meal gets taxed.
Lets assume that half the meals tax revenue in the winter months is paid by locals. That is a conservative assumption for starters, Looking at the monthly totals we see that winter collections are about two thirds of the summer month collections. That means that even in summer, locals generate about a third of the meals tax (assuming their eating habits are consistent). For the peak year this means that locals paid about $4,000,000 in FY 03-04 or $1,600,000 last fiscal year. Assume 30,000 locals and thats $147 for every man woman and child in the county in FY 03-04 or $52 last year. Multiply that times 2 or3 or 4 family members and it starts to add up. You can argue the assumptions at the margins but any way you figure it the locals ante up a healthy (or unhealthy depending where you eat or what kind of tea party you like) amount in prepared foods tax.

OK so what? you already knew all this from reading Russ and Ray. What this points out is that while the prepared food tax hits locals there is a tax that doesn't. When you compare the occupancy tax to the prepared meals tax the differences is dramatic. For meals the low is about 66% of the peak but for occupancy the Feb. revenues are no more than 3% of the peak. There are virtually no tourists in Feb and hence no taxes. If you want a tax that tourists pay and locals don't then occupancy is your tax of choice. I know you wanted another chart so here is the same chart as above but for occupancy tax. Wow what a difference.
Which finally leads us back to Nags Head and beach nourishment. When Mayor Bob Oakes drafted his funding plan for local nourishment projects he chose a new occupancy tax as the primary funding source. This is both a shrewd political and financial choice. This tax has been more stable and more palatable. It undercuts opposition to nourishment based on the "I don't want to pay for it" rationale. Assuming it gets levied, it will be interesting to see if this tax gets repealed as the sales tax was overturned. It will be a harder sell since its pretty clear that locals don't pay much of this tax.

OK, that's my 2 cents worth. Hope I have enough left to cover the tax on a "No Name" at Country Deli - tax or no tax still the best sandwiches east of Jockeys Ridge.
Ciao