Lower the Tax Rate - Increase the business

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gillumhouse's picture
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The BandBer had a great blog today. It is directed at the UK but is applicable everywhere. The bed tax as it is called in my State adds a lot. In some cities (not in WV) the sales/bed tax combo adds 20% to the bill. Here is his blog:

http://www.thebandber.com/2013/04/how-bbs-can-help-save-britain/#more-31...

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I just ran across this article about hotel (bed) tax and thought of this thread.  It is regarding a proposed 1.5% hotel tax increase in New Orleans to pay for a redesign of a riverfront area.  It states:

"Guests currently pay a 13 percent sales tax in New Orleans, which puts the city at the low end of the country’s top 25 hotel markets, according to figures from the American Hotel & Lodging Association Information Center. Houston and Anaheim top the list with a 17 percent sales tax rate."

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05/30/2008

Well, 13% is lower than what I collected here in total taxes (lodging tax + State & local sales taxes)!  And this town is nothing like New Orleans!!

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Breakfast Diva's picture
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The last meeting is tonight for the proposed trt tax. It won't be on the ballot until Nov. but what I'm sure I'll have to do is to volunteer for the board once it gets going just so I can get some input. Like I need another thing to do! At least if/when the tax happens it won't be until next year so I'll be able to implement the tax without chaos because it will happen in a slow season.

I wonder if it will impact our reservations Time will tell

muirford's picture
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Breakfast Diva wrote:

 what I'm sure I'll have to do is to volunteer for the board once it gets going just so I can get some input. Like I need another thing to do!

It's painful to spend the time sometimes but that is the only way to make sure that the revenues are useful for you.  Our B&B contributes about 25% of the total town CVB budget, and the independent hotel contributes the other 75%.  I look at it as a way for me to leverage $$ for marketing that I wouldn't otherwise have access to, as that hotel spends WAY more than I do on advertising.  And I don't have to go through the painful state grant process to get money, which is drying up this year.

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Breakfast Diva's picture
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You're absolutely right. Sometimes I get so tired/frustrated at being the squeeky wheel. I'll get over it. frown

muirford's picture
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We have a strange situation here - we have the extra bed tax, but only my guests and 1/2 of the 72-room independent hotel pay theirs to the town, because we are the only ones with the town limits.  But 1/2 of the bed tax goes to support our town CVB, and the council voted to give us additional monies this year (another 20% of the tax) to the SVC this year, in large part due to the town CVB lobbying for the additional funding to do more promotion of the town.  With that, we maintain a website which is always in my top 5 referrers - and if that was all it did I'd be happy.  But in addition, we partner with some of the events in town, and organize others, to create a stronger marketing presence.  I am on the town CVB board - my biggest challenge has been moving them to do more online marketing, but we are making progress.  So, for us, the bed tax works, and it hasn't put many people off, if any.  It is 1% less here than across the river in our neighboring state.

gillumhouse's picture
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I am extremely happy to hear it is being used actually for tourism!! Woohoo!! The city that killed our CVB has a Mayor who with his partner were involved in a funding thing that hurt many cities and institutions around the State as it was the "preferred" funding conduit. My City never went for more than it could pay so we were not hurt thank goodness. He is still Mayor but the partner was indicted I think. Have not heard yet what the final outcome was. The other CVB is not worth the deposit in an outhouse.

Breakfast Diva's picture
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My state has a law that 70% of the transient room tax collected must be used for tourism. My county currently has no trt, so I only have to collect the 1% that goes to the state. They are currently putting together a measure for a county wide trt ONLY because they want to get their greedy little hands on that 30% they can legally get and put it on roads (I guess "tourism" can be loosely defined). They couldn't care less about actually promoting the area! If this goes through, I'm afraid at what the numskull ideas will be for the remaining 70%. No one here knows how to have an effective tourism campaign except for the 1 major national company that is based in my county...of course they really only care about themselves.

Oh yeah, and there's a road tax bill happening in May. Oh goodie, possible higher taxes crying

 

gillumhouse's picture
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Most places here use the other 50% of the bed tax for parks or sidewalks - saying that improving the sidewalks and recreation IS a tourist item. Sidewalks I can agree with, the recreation areas are places the average tourist will never see unless going to one of the festivals.

My City had an increase in collected taxes - more houses occupied/built with values going up - so they rolled back the real estate tax rates - a tiny bit (all they could do by State law) but every little bit helps. It is now .249 per hundred of valuation instead of .25. How long has it been since your taxes went down at all?

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06/24/2008

Here as well.  They first try to convince the locals if too much resistance they turn to the hotel tax.  We (hospitality assoc.) has successfully warted off several of these added taxes by stating that we will be driving away people who come here and spend $. 

What is equally surprising is the fact that most travelers don't even ask about taxes when they call.   Due to my size and location my tax rate is 8% lower than all the other accommodations around...  I make a point of sharing that info when I get a 'shopper'.

 

gillumhouse's picture
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Due to being in a municipality that never enacted the hotel tax ordinance (they had no lodging facilities at the time), I cannot collect the extra 6% tax and I do indeed tell people they can save 6% by staying here. Half of the tax supports the CVB so I had the City in the process of drawing up the ordinance when a neighboring city "killed" the County CVB by starting their own. 

The County Seat city then started THEIR own CVB completing the killing process. Since neither are going to do squat for my City, I advised to stop the ordinance, which they did.

Arks's picture
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05/22/2010

copperhead wrote:

What is equally surprising is the fact that most travelers don't even ask about taxes when they call. 

No, I've never considered hotel taxes when I've booked a room. But I HAVE experienced sticker shock when I've checked out and seen the $89 room become $104 when they tack the state and local taxes on, and that unpleasant shock could cause me to avoid future trips to that area.

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OnTheShore's picture
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08/28/2011

I always make it a point to mention the tax (rate and amount) when giving a quote, so that there are no surprises. Of course every accommodations provider in the state has to collect the same tax, so there is no competitive advantage or disadvantage to mentioning it or not mentioning it.

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Madeleine's picture
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09/29/2011

I stayed in NY a few months ago and the lodging tax was 12.12%. Even the woman on the phone said she couldn't explain it. Maybe it's gone up to 13.13% this year.

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Arks's picture
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Id' be all for our town's bed tax if it went for advertising and promotion to put more heads in beds. But it all goes to maintain the local ball fields and baskball court. The city loves having a tax that is paid only by "people from off", their words for visitors/tourists.

Madeleine's picture
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09/29/2011

Right, because everyone who stays in a hotel/motel/B&B in our towns/counties/states is 'from away'. Everyone who eats in a restaurant is a tourist. Everyone who goes to an attraction or historic site is just passing through.

I think the lodging tax in upstate NY was almost 17% after everyone got their piece of me.

We did (the innkeeping association) successfully fight a raise in the lodging tax a couple of years ago. And there was a lot of 'rich vacationers from away pay this, they won't care' attitude going around.

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