Hotel-Motel Tax readings, round 3

Armed with new aldermen and the endorsement of an advisory committee, Farragut Board of Mayor and Aldermen is poised to reconsider a proposed hotel/motel occupancy tax at its first meeting of the new year.

The Board will discuss, and likely vote on, first reading of Ordinance 20-01, which would add Title 5, Municipal Finance and Taxation of the Farragut Municipal Code, by adding Chapter 1, Hotel/Motel Tax tonight (Thursday, Jan. 9) during its regular meeting.

If approved this week, then again on second reading Thursday, Jan. 23, a 3 percent tax would be levied on guests in the nine hotels in Farragut starting March 1.

Currently, hotel guests in Farragut pay only the 14.25 percent required by Knox County; adding the 3 percent would bring it to 17.25 percent, putting it in line with what guests pay in the city of Knoxville.

It will be the third time the Board has entertained the proposed tax.

In 2013, the topic was tabled, then it was considered again in 2018 but failed in a 3-in-favor, 2-against vote (needing four “in favor” votes for its passage).

Those three “in favor” votes remain on the current board, led by Mayor Ron Williams (an alderman in 2018) along with Aldermen Ron Pinchok and Vice Mayor Louise Povlin. They are joined by Aldermen Drew Burnette and Scott Meyer in their first Hotel-Motel Tax consideration.

The late Dr. Ralph McGill, who was mayor during the 2018 vote, joined former Alderman Bob Markli in voing against the tax (See Markli’s Letter to the Editor in the Opinion section, page 4A).

Markli was defeated in the mayoral race by Williams later in 2018.

In 2018 Tennessee General Assembly allowed Farragut to reconsider the tax.

The program’s current operating budget is $113,350. According to Town calculations, a 3 percent tax rate on the hotels at 50 percent occupancy was estimated to be just under $340,000. At 69 percent occupancy, which documents noted was Farragut hotels’ average occupancy for 2018, the tax would yield just under $469,000.

How those funds could be spent was the topic of a Dec. 11 BOMA workshop: possible needs listed were additional advertising, marketing, promotions, way-finding plans and signage and training and professional support.

Tourism-supported funds

Any proceeds raised, Town leaders have said, would go to its Tourism program, which began in early 2018 when part-time tourism coordinator Karen Tindal was hired.

She has since overseen a growing program, Visit Farragut, while working with various social media platforms and other venues on Town promotion.

Additional support has been offered by the Town Tourism Advisory Committee, which voted unanimously in September to recommend the Board reconsider approving the “Occupancy Tax.”

“The goal of the Tourism Program is to increase the number of tourists and visitors coming to the Farragut community by spending money in our hotels, restaurants, shops and utilizing our public facilities,” stated a report prepared by Town administrator David Smoak and included in the Board packet for the Jan 9 meeting.

“In order to run an effective program, it will take a significant investment by the Town to market to visitors and improve amenities that will draw those visitors to Farragut,” it further stated.