Flagging tourism prompts Jackson to hike room tax
Tourists staying in Jackson County will pay more on their hotel bills starting Jan. 1. Commissioners this week hiked the tax from 3 to 6 cents, the highest room tax rate allowed by state law.
“If this money is spent wisely, I think it might be a good thing,” Dillsboro Inn owner T.J. Walker said Tuesday. “I’m not against it — but I’m not aware of it enough to be for it, either.”
Jackson County will have twice the room tax of most Western North Carolina counties, which largely set the rate at 3 percent. Haywood and Buncombe have 4 percent, Henderson has 5 percent. Only the town of Franklin has a room tax of 6 percent, though outside the town limits in the rest of Macon County it is only 3 percent.
Jackson County commissioners approved the room tax hike this week in a 4-1 vote, with Commissioner Mark Jones of Cashiers casting the lone no vote.
This summer, Jackson County received authorization from the state legislature to increase its room tax up to 6 percent, but had to vote to enact it.
Before voting, county leaders reviewed tourism-related information about neighboring counties. It shows Swain County is leading the pack, with 3,210 tourism-related jobs compared to 560 in Jackson County — a difference likely accounted for by the Nantahala Gorge outdoor scene and Harrah’s Cherokee casino.
Jackson County, like most counties, has seen a decline in room tax collection rates with the recession; starting about four years ago. The past couple of years, room tax collections have been rebounding, but Jackson seems to have faired worse than its neighbors, with bigger drops and a weaker rebound.
“We need to redouble our efforts to attract tourists to Jackson County,” Commissioner Doug Cody said. “Anything we make off tourism helps relieve pressure off of property taxes … these are taxes tourists pay. The citizens of Jackson County will not be burdened with another tax.”
Commissioner Charles Elders described the numbers that show Jackson lagging “troubling.”
Jones, who chairs the Cashiers Area Travel and Tourism, did not specify exactly why he voted against the tax increase. But he did caution his fellow commissioners that “I hope the intent of these monies is to stay within the original intent,” that is, to market and promote tourism.
New state language in the law, Jones said, allows “it to be piggybacked on, it allows for hardscapes — as long as it promotes tourism.” Historically, room tax — under state law — had to be spent on tourism promotion. Now, it can be spent on “tourism-related” developments, which could include sports fields to attract tournaments, greenways or festival venues.
County Manager Chuck Wooten said the original 1987 resolution by Jackson County authorizing a room tax would need modifying before any actions except promotion could take place.
“We don’t have to decide that right now,” Chairman Jack Debnam said.
The formula for distributing the additional room tax is unclear. Currently, 75 percent of room tax collected in Cashiers is used exclusively by Cashiers to promote that area rather than the county as a whole. The rest of the room tax is managed by the countywide Jackson County Travel and Tourism Authority, a public body.
Current tax rates
Haywood County 4 percent
Jackson County 3 percent
Macon County 3 percent, plus town of Franklin imposes an additional 3 percent
Swain County 3 percent
Collection rate comparison
Jackson County
• 2006-2007 $506,574.48
• 2007-2008 $506,004.53
• 2008-2009 $429,378.27
• 2009-2010 $413,939.07
• 2010-2011 $446,339.59
Swain County
• 2006-2007 $305,352
• 2007-2008 $320,820
• 2008-2009 $309,802
• 2009-2010 $335,353
• 2010-2011 $352,437
Haywood County
• 2006-2007 $935,000
• 2007-2008 $1.04 million
• 2008-2009 $954,000
• 2009-2010 $891,000
• 2010-2011 $962,500
Tourism rebound
Tourism spending is on the rise after three years of stagnation and decline. The North Carolina Division of Tourism, Development conducts an economic impact study every year. It uses the industry standard “Travel Economic Impact Model” to measure the impact of travel, a disaggregated model that looks at everything from lodging and food to retail and recreation. Here’s a decade’s worth of those tourism economic impact numbers.
Haywood
2000 99.9 million
2001 97.7 million
2002 97.8 million
2003 95.9 million
2004 97.69 million
2005 103.4 million
2006 111 million
2007 116.6 million
2008 113.6 million
2009 108.9 million
2010 116.3 million
Jackson
2000 50.5 million
2001 50.1 million
2002 53.6 million
2003 53.5 million
2004 55.7 million
2005 61.7 million
2006 68.2 million
2007 72.6 million
2008 69 million
2009 60 million
2010 62.5 million
Macon
2000 89.7 million
2001 81.1 million
2002 89.8 million
2003 85.9 million
2004 92.2 million
2005 102.5 million
2006 111.1 million
2007 115.4 million
2008 120.5 million
2009 114.5 million
2010 122.1 million
Swain (includes Cherokee)
2000 N/A
2001 199.2 million
2002 214.8 million
2003 216.8 million
2004 213.5 million
2005 222 million
2006 240.8 million
2007 251 million
2008 233.3 million
2009 237.3 million
2010 256.3 million
Jobs directly related to tourism for 2010
Haywood 1,300
Jackson 560
Macon 1,120
Swain (includes Cherokee) 3,210
Tourism agency targets tourist rentals flying under the room tax radar
Haywood County business owners who have been dodging the 4 percent lodging tax will now find themselves facing a crackdown, although some dodgers may not even be aware of their crime.
The lodging tax applies not only to hotels, B&B’s and traditional overnight stays, but also to those who rent out vacation homes or rooms for fewer than 90 days.
A flyer will be included in every property tax bill this year explaining the 4 percent tax vacation home owners should be levying and remitting to the Haywood County Tourism Development Authority.
Many second-home owners who rent their houses on the side for a little extra money often don’t even know that they have to pay, said Lynn Collins, executive director of the TDA.
Collins and her team trawl Websites such as Trip Advisor, Home and Away, and VRBO, which all advertise vacation rentals, complete with address, photos and customer reviews.
Mostly, when people realize they have to pay, they’re pretty good about getting compliant, said Collins.
Collins calls the push to bring in the money an awareness campaign, but her group isn’t just trying to reach the unknowing. They’re going after folks who have simply stopped paying outright, not only by the standard methods of levying fines but also pursuing delinquents through court.
Determining why business owners don’t pay is a little tricky, especially motel owners who know they should and simply don’t.
“It’s a combination of things. Some of it has to do with the economy, some of it has to do with awareness,” said Collins. “For the people who have perhaps quit paying or quit filing, we don’t know.”
For those who use the economy as an excuse to not pay, the reason falls pretty flat.
“This is not coming out of their pockets,” said Collins.
The businesses are simply acting as a pass-through from customer, who pays the extra tax on their overnight room bill, and remitting it to the TDA.
Many businesses, she posits, may not consider the tourism tax quite as mandatory as across-the-board taxes like sales and income tax.
And, said Collins, the tourism authority hasn’t been as staunch about enforcing the laws in the past, which will now change.
Collins said that businesses who begrudge the tax should recognize that its buying them a range of marketing services, even for small, by-owner vacation rentals.
“They get a free listing on the TDA website, they get a free listing in the TDA visitor’s guide, they get a free listing in the state visitor’s guide and travel website, so there’s a tremendous amount of marketing being done on their behalf,” said Collins.
Regardless of the benefits, paying up is just the law.
“We’re losing a lot of money and it’s not fair to the folks who are following the law and paying the tax for some of their peers to not be doing it,” Collins said.
Room tax plan would split Macon into three districts
By Jennifer Garlesky • Staff Writer
A plan to distribute Macon County’s occupancy tax has been formulated, leaving the final approval up to the board of commissioners.
Swain tourism board faces changes
Swain County commissioners are moving forward with a plan to reshape the county’s tourism board despite some opposition.
Haywood likely to hike room tax, change tourism board make-up
A proposed 1-cent increase in Haywood County’s tax on overnight lodging and a completely new make-up of its tourism board will likely be approved during this session of the General Assembly.
Plan to buy building with room tax hike meets opposition
A push to move the Swain County Chamber of Commerce into a vacant bank building is meeting resistance from some lodging owners because of a proposed room tax increase.
Recreation could be big winner in TDA shuffle
The tax on overnight lodging in Haywood County could be increased next year pending approval by the state legislature.
Work of hired consultant causes confusion among lodging community
By Sarah Kucharski • Staff Writer
Late last month Macon County consultant Gary Nicholson sent out 351 letters to local accommodations owners to begin building a database of who is supposed to pay the county’s 3 percent tax on overnight lodging aimed at tourists.
Subject to tax, where applicable
Every few weeks, Scotty Ellis cruises the newspaper classifieds, scans Web sites and scrounges brochures from kiosks at visitor centers looking for vacation homes to rent in Haywood County.