Occupancy tax bill makes Raleigh deadline
A local bill proposing to increase the Haywood County occupancy tax from 4 percent to 6 percent was introduced March 13 to the North Carolina General Assembly.
Rep. Joe Sam Queen, D-Waynesville, introduced the bill in the House while Sen. Jim Davis, R-Franklin, introduced the bill in the Senate. The proposed bill has been altered since the Tourism Development Authority first discussed it in February. If passed as written, the act would expire July 1, 2023.
The legislation would allow the county to levy and collect an additional 2-percent tax on all accommodation rentals to be spent on tourism-related capital expenditure projects. The additional revenue will be remitted to the TDA. The bill states that the TDA shall create a Tourism Product Development Fund “to provide financial assistance for tourism-related capital projects that significantly benefit patronage of lodging facilities in Haywood County.”
A Product Development Committee shall also be formed with the purpose of reviewing and evaluating project proposals from applicants and making recommendations to the TDA.
Another change to the bill was the makeup of the committee. Maggie Valley Board of Aldermen was concerned Maggie wouldn’t be fairly represented on the committee because earlier draft language stated the committee would be made up of commissioner appointees and members representing each municipality.
The new draft states that the committee will be composed of 11 voting members: one member representing each zip code, and the remaining members allocated to zip codes contributing more than 10 percent of the total taxes collected in the previous fiscal year. Maggie Valley collects about 55 percent of the accommodation taxes.
Committee members also must be from the lodging or tourism-related industry, recommended by each municipality and approved by the board of commissioners.
The Maggie Valley Board of Aldermen held a public input meeting on Feb. 25 regarding the proposed tax increase. After hearing opposition from many local accommodation owners, Alderman Phillip Wight made a motion to oppose the legislation. The motion failed due to a 2-2 tied vote. Aldermen Mike Matthews and Wight voted against the legislation while Alderman Saralyn Price and Mayor Ron DeSimone wanted to support the legislation.
The board reviewed a copy of the proposed bill again during a Tuesday meeting. Given the recent changes to bill’s language, DeSimone asked the board if it wanted to reconsider supporting the legislation. He said he had worked closely with commissioners and the district’s legislators to make sure the bill reflected the needs of Maggie Valley.
Matthews said he was willing to change his vote because of changes that had been made to the legislation language.
Wight said he liked a lot of things in the new language, including the makeup of the Product Development Committee and the sunset clause.
“With all the positives, I can still say it may not go deep enough for me,” Wight said.
Matthews made a motion to pass a resolution supporting the legislation and it passed 3-1 with Wight opposed.
However, Matthews said he was surprised to see that the language he had in front of him on Tuesday was not what was introduced on Wednesday. He said he would have not changed his vote if he had known the bill would change.
The document given to Matthews by DeSimone stated that the tax would expire after six years instead of 10 years and that committee members would have to be accommodation/lodging owners. He also said the amount the TDA can use for administrative costs increased to 5 percent.
"I was trying to sell it to those who were opposed," Matthews said. "I feel like we were misled."
He said it may be too late to do anything about it, but he has made calls and sent emails to Queen, Davis and Rep. Michele Presnell. He was told the reason the sunset clause was increased to 10 years was because the TDA or county wouldn't be able to borrow money for larger projects if it was only for six years.
"That's what everyone feared and was against," Matthews said.