Town Hotel-Motel Tax, 3 percent, starts June 1
After changes to the ordinance that would govern it, a 3 percent Hotel/Motel Occupancy Tax was approved by a 4-1 vote of Farragut Board of Mayor and Aldermen on second reading Thursday, Jan 23.
Hoteliers voiced concerns about the time frame to enact the tax — having already signed lodging contracts for the calendar year — during the Jan. 9 meeting, when the ordinance was approved on first reading, as a new ordinance read Jan. 23 reflected a pushed back starting date.
The tax, which is earmarked for and can only be used to promote tourism, was initially to have begun April 1, but will now be effective June 1. Also, the tax will not be collected on group contracts signed before March 1, so as to not impact the hotelier’s profits on those agreements.
These group contracts are exempt from the tax through the end of 2020.
Mayor Ron Williams and Aldermen Drew Burnette, Scott Meyer and Ron Pinchok voted for the tax, while Vice Mayor Louise Povlin — who supported a 2 percent tax instead of 3 — voted against, just as she did on first reading.
Prior to the vote, hotel representatives again implored BOMA not to approve the tax, as did former Alderman Bob Markli.
“Industry experts who live, eat and breath this on daily basis, like myself, will tell you this will hurt our business, yet we are still here, having to fight this tax,” said Sam Patel of Comfort Suites, who was one of four speaking against the tax during the meeting.
“Farragut is not a tourist destination like Pigeon Forge … or even Knoxville,” he added.
He also asked for the issue to be presented to Farragut citizens in a referendum vote.
Burnette said he is in favor of evaluating the tax down the road.
“... I’m more than willing to look back and say, ‘we had great ideas and it didn’t work,’ and remove it, without a doubt,” he said.
“By no means do I see this as a lifetime tax.”