Consider this case for an added tourism tax
My husband and I own two businesses in Maggie Valley, a photography studio and three vacation rental homes. I also currently volunteer as a board member of the Haywood County Tourism Development Authority.
The TDA is a not-for-profit organization with 15 board members representing the county and towns of Canton, Clyde, Waynesville, Lake Junaluska and Maggie Valley. Its mission statement is: “to promote the travel industry as sustainable economic development for the benefit of Haywood County.”
Playing devil’s advocate, let’s do away with the TDA. What would our tourism dependent county look like? For starters, we would likely be the only tourism centric community that did not have a tourism not-for-profit organization in the entire U.S.A.
The TDA collects money from lodging businesses such as motels, hotels, B&B’s, cottages, vacation homes, cabins, etc.
The tourism tax rate is currently 4 percent of room or house rental fees. The TDA retains 3 percent for its programs while 1 percent is returned to the zip codes where the funds are collected.
This tax is paid by the tourists staying at the accommodations of their choosing. The lodging business owner collects this tax as part of their guest’s bill and pays it monthly to the TDA.
The tourism tax is in addition to the 7 percent North Carolina sales tax. The total tax rate that any lodging facility charges is therefore 11 percent of their rental rate.
The rate at one of my properties is $75 per night resulting in an additional $8.25 per night totaling $83.25.
That $8.25 is collected on behalf of the county and is not regarded as income for my business. Of that $8.25, $3 per night goes into the TDA coffers; the balance goes to the state.
Locally, the funds are used solely for the promotion of tourism in Haywood County through a variety of mechanisms.
Keep in mind, the tourism industry in Haywood County accounts for more than $126 million in economic impact for the county and employs more than 1,300 of your family, friends and neighbors which totals nearly $24 million of payroll incomes. State and local tax revenues attributed to travel in Haywood County amounted to $11.4 million last year. Evaluated from an alternate perspective, that’s a $192.10 tax savings for each resident in the county.
What would the negative impact be to the county’s tourism trade if the TDA ceased operations?
Aren’t the businesses in the county and their employees the beneficiaries of the marketing program which potentially bringing visitors and the money they spend to our community?
Individually, many of the county’s tourism-related businesses would not be able to promote Haywood County with billboards, attend marketing shows, advertise in magazines or produce maps and literature.
Pooling resources through the TDA and asking our visitor’s help in keeping our tourism trade vibrant makes these things possible for our small community.
I have never in the eight-plus years that I have been offering vacation rentals had a renter tell me that my tax rate was too high. The additional tax that has been proposed was regrettably presented poorly.
Knowing what I do now and hearing the rhetoric that’s resulted, I have to ask, how many of you would like to see local businesses have the opportunity to expand, initiate new projects or build on a vision?
Who has a business idea that has been nagging them for years to attempt but just didn’t have the capital to try?
Do you know of a business that is located elsewhere that would fit really well into our community but needs some additional incentive to make the final decision to move to Haywood County?
The additional 2 percent tourism tax is designed for capital expenditures. This tax would be paid by tourists, collected by the lodging facilities and sent monthly to the TDA.
A tourism product development committee would be appointed by the county commissioners to review applications and recommend funding allocations for projects to the TDA.
These are funds for the community, paid for by our visitors to help us along in growing our infrastructure for their enjoyment.
An increase in infrastructure brings a chance for more jobs, an opportunity for new business, an increase for existing businesses from both residents and visitors and in general creates a heighted sense of well-being for the community at large.
The growth of this capital will not happen overnight and it will take some time to see results. But, if we don’t start now, we are delaying opportunity which costs everyone in the county.
I hear from business owners that they want to know what is being done to bring business into the county. Well, we currently have one method; the 4 percent tax for marketing expenditures. Now, a 2 percent tax is being proposed for capital expenditures.
Going back to my situation I used earlier with an increased tax rate from 11 percent to 13 percent would result in the following; charging a base rate of $75 per night the total would increase from $83.25 per night to $84.75 per night; an increase of $1.50 per night.
How many tourists will a $1.50 per night chase away?
That’s it folks. So, you are either for it or against it.
There doesn’t need to be any mudslinging, negative talk or salacious comments. It’s simply business marketing and capital of which we need both to be successful.