AUGUST 27, 2009 ISSUE
Boone Occupancy Tax Doubles to 6 Percent
The Boone Town Council unanimously approved an increase in the occupancy tax rate from 3 percent to 6 percent at its monthly meeting August 20. That means customers staying at the town’s hotels, inns and other lodging facilities will pay $12 in occupancy tax on a $200 room effective October 1, 2009.
The Town of Boone is authorized by the N.C. General Assembly to collect a room occupancy tax for the purpose of tourism development. Under the new resolution passed by the town, at least two-thirds of the tax proceeds must be used to promote travel and tourism in the town, and any remaining proceeds must be used for tourism-related expenditures.
A public hearing on the rate increase was held prior to the vote. Mac Forehand spoke on behalf of the Boone Convention & Visitors Bureau. Forehand said the tax increase would nearly triple the amount of money available for tourism promotion and would put Boone on par with occupancy tax rates in neighboring towns.
“Most people are at 6 [percent],” Forehand said, including the towns of Blowing Rock, Banner Elk and Beech Mountain. Tourism is a $190 million industry in Watauga County, he said.
Boone occupancy tax revenues for fiscal year 2009-10, with the new 6 percent rate taking effect October 1, are projected to be $1,071,000, said Greg Young, Boone town manager. After administrative expenses, revenue is split between promotional expenses administrated by the Boone Convention & Visitors Bureau and tourism-related expenses that are administrated by the town through the Tourism Development Association (TDA).
The new occupancy tax resolution increases the amount of tax revenue spent on promotion from 60 percent to two-thirds, or 66.6 percent. The Convention & Visitors Bureau received $314,000 for tourism promotion in 2007 and $309,000 in 2008, Forehand said. With the new 6 percent tax rate taking effect, the Convention & Visitors Bureau projects to receive around $695,000 for tourism promotion in 2010, he said. The occupancy tax is the bureau’s only source of revenue.
Tourism-related expenditures can be spent on anything designed to increase the use of lodging facilities in the town by attracting tourist or business travelers, including capital improvement projects.
Young said the town expects to receive a rough estimate of $340,000 for tourism-related expenses in a full fiscal year with the 6 percent tax rate. The amount budgeted for tourism-related expenses for the 2009-10 fiscal year at the 3 percent tax rate was $157,500.
Town Council Member Lynne Mason, who serves as a town representative on the TDA board, said the TDA was in full support of the tax increase.
“I’ve heard no concerns,” she said.
Forehand added that the Boone/Blowing Rock Lodging Association also passed a resolution in support of the increase.
“They want the added promotion,” he said.
The General Assembly must approve any increases in municipal occupancy tax rates. House Bill 401, introduced by Rep. Cullie Tarleton (D-93), authorized the Town of Boone to increase the rate to 6 percent and was ratified on July 13.
By the Numbers
Tourism & Occupancy Taxes
$190 million—amount of money tourism brought to Watauga County in 2007
$1,071,000—projected Boone occupancy tax revenues for fiscal year 2009-10
$695,000—projected amount to be spent for Boone tourism promotion in 2010
Community Interest
News & Notes
Events
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