It took a little longer to gather some information to do the second part of our hotel tax series. During that time, the County passed their 2.5% increase 15-4 , taking the county hotel tax to 5%, and the combined tax to 17.25% . Hospitality lobbyists and professionals have threatened a lawsuit, and promised to work against those who voted yes at the next elections.
Where’s The Money Going?
That’s seems to be a small bit of the rub at the latest meeting. The tax was proposed on the premise of hiring more firefighters for unincorporated areas. 8 full-time firefighters to be exact. However, comments made during the meeting suggest, that what County Mayor Burgess wants, may not be what he gets. On paper the county would receive an extra $1.6 million in revenue with this tax hike. And since most conventions, sporting events, etc. are booked well in advance, on paper for the next year, it’s plausible that number is reachable. But, will the money be used for firefighters? There seemed to be some disagreement with that. See, the tax was voted on before the Budget, Finance, and Investment Committee had time to research other ways to fund the firefighters. One commissioner wants to see it used for new schools. Since the BFI Committee didn’t vote on the original proposal when it came through, this now comes back to them , earmarked for nothing. In short, until the County Budget, Finance and Investment Committee now decides what is to be done with these extra funds, no one knows where the funds are going.
City of Murfreesboro Has Big Decision As Mayor Speaks Out
Within this whole melee is the fact that Mayor McFarland and The City of Murfreesboro have also been contemplating doubling their current 2.5% hotel tax. Recently, just before the county vote, the Mayor addressed the subject on his Facebook page :
“TOPIC: Hotel Motel Tax
I have been asked many times about the proposal of raising the Hotel Motel Tax.
My quick opinion is that the “spirit” of the Hotel Motel tax is supposed to go back to support Tourism and Economic related activities. The Hotel Motel tax stipulates 30% of the money collected goes back to the industry. In this case, the County proposal is actually raising the taxes and lowering the percentage that would go back to into generating MORE tourism and economic related activity.
The City of Murfreesboro spends $12 million dollars per year on our Parks and Rec system. This generates significant income for our local small businesses, hotels/motels, restaurants and many other retail and service businesses. In other words we spend money to bring in sales tax revenue and the Hotel/Motel industry benefits from that investment.
On the flip side, taxing Murfreesboro businesses to provide fire service for the unincorporated areas of Rutherford County is just plain wrong. I understand the need for fire service and also know how expensive this service costs the residents and the benefit it provides in protection and lower insurance rates.
With all due respect, if the unincorporated areas of the County desire a fire service…. it makes sense that these specific areas should pay for the service…..not DOUBLE taxing the municipality businesses and residents who are already paying for these services.
I have relayed this opinion to County Officials. I understand the tough job that the County has and want to do everything I can to support OUR County, but Murfreesboro residents make up a MAJOR portion of the County revenue (64% of the sales tax and close to 50% of the property tax) and we can’t continue to TAX Murfreesboro businesses for services they are already paying for through the City. The municipalities have made the investment for these businesses to locate in our jurisdiction and the County benefits from those investments without providing services to these businesses.
As a small business owner, no matter who pays for the tax, an extra cost levied on a business is passed to the consumer and in this case the COUNTY could be a huge loser in the long term.
Long before I was mayor of Murfreesboro, there has been a spirit of cooperation with the County, Murfreesboro, Smyrna, Lavergne and Eagleville. This issue should be no different. Our County Mayor and Commissioners have a very tough job and they do it well, but in this case the Hotel/Motel tax proposal should be re-evaluated.
IF , and once again I stress the word IF, Murfreesboro were to raise their allowed 2.5% to 5%, it would give a combined hospitality tax of 19.75%. By the way, the county would win twice in the fact that now cities closer to Nashville and within traveling distance of Murfreesboro would have lower rates, thereby more likely to attract tourists than the City of Murfreesboro. Mayor McFarland and the City Council will have a tough decision to make in the coming months: Become one of the highest taxed tourist areas in the state , or even Southeast, or, re-evaluate how to promote tourism, host sporting events, with what they have.
Answers To Questions From Readers, Poll Results:
At this point it’s hard to project how this will effect tourism. If it has minimal effect, then people will keep on booking, and the money will roll in. If people find this as a turn off , then people won’t book, and you’ll just make the same money , or less, than you were before. As for the citizens of the county, it’s the same , either this works and your taxes won’t get raised, or it won’t and eventually they will. How this effects the hotel industry and their 3,000 county employees is yet to be seen also. For every study we found negative, we found a positive one. There aren’t many out there.
From this writer’s standpoint however, the County has handcuffed the City of Murfreesboro. They have left the City in a “dang if you don’t ,dang if you do” dilemma. It will be interesting to see how the Mayor and the City Council address this in the coming weeks and months.
After our last article, we received questions from a few readers and thought we would address those and also give you our poll results from the first article:
Do the High School Teams that come in for Spring Fling, State Basketball Championships, etc. pay Hotel Tax?
All High School Sporting Events pay the Hotel Occupancy tax. Most are exempt from Sales Tax.
What About Teams That Come In To Play MTSU ?
They may apply for state tax exemption, but pay Hotel Occupancy Tax.
What About government employees on the state and local level?
While travelers that are travelling on business in which the state or government reimburses them are exempt from the state tax, it is extremely rare for a traveler to be exempt from the occupancy tax.
Special Thanks To Sandra Miller Roberson, General Manager, DoubleTree by Hilton Murfreesboro and Pamela Little COOPER HOTELS | REGIONAL SALES MANAGER DOUBLETREE BY HILTON for helping us with our reader questions.
Our Poll Results: