To help Town lodging biz, 3-month delay to start hotel-motel tax passes 1st reading

Farragut Board of Mayor and Aldermen cleared the first hurdle Thursday, May 14, toward offering a three-month delay on collecting the Town’s 3 percent hotel/motel occupancy tax, which was originally set to begin June 1.

BOMA voted unanimously on first reading during its regular meeting to approve an ordinance delaying collecting of the tax until Sept. 1, based on how hard the COVID-19 shutdowns had hit the hotel industry.

“Since the ordinance was enacted, the entire world has been reeling from the health and economic impact of the COVID-19 virus,” Town administrator David Smoak noted in his report to the Board. “One sector of the economy that has been hit particularly hard has been the hospitality industry. Through budget discussions … it was proposed (to) delay implementation of the hotel/motel tax for an additional three months.

“This would give hotels more time to weather this economic crisis and give visitors more time to feel comfortable traveling again ....,” he added.

While initial budget discussions estimated $25,000 could be generated monthly from the tax, the FY2021 Tourism Fund budget — which the tax was earmarked to help fund — has been reconfigured from $300,000 to $225,000.

“I think this is the right move for our hotels and motels, and I agree with it,” Alderman Scott Meyer said during discussion.

The ordinance would go into effect only after BOMA approves it on second reading at its Thursday, May 28, regular meeting.