By allowing ads to appear on this site, you support the local businesses who, in turn, support local journalism.
City may levy new tax on hotels
Placeholder Image

McMinnville has been given permission from the state legislature to levy a 2.5 percent hospitality tax on local motels.
Officials must now decide if they want to pursue the tax by passing an ordinance to enforce it.
Per state requirement, the ordinance must receive two-thirds majority vote by the Board of Mayor and Aldermen, which is greater than the threshold of more than half which is normally used. Ordinances require two passing reads.
City attorney Tim Pirtle says there is an audit requirement by the state.
“The act passed by the legislature authorizes the city, by a two-thirds vote on two readings of the Board of Mayor and Aldermen, to levy 2.5 percent hospitality tax within the corporate limits,” said Pirtle. “It is incumbent upon the city, if the tax is levied, to collect the tax and to annually audit the hospitalities that are generating the tax to determine whether or not they are in fact complying.”
McMinnville could have requested the state allow it to collect up to 5 percent, matching Warren County’s hotel/motel tax. State representatives expressed concern that 5 percent would not pass the legislature. City officials considered 3 percent and it was lowered to 2.5 percent.
Alderman Everett Brock asked, “Is the county auditing them?”
“This is a self-reporting tax,” said Pirtle. “This is the form the county uses. They already have a 5 percent hospitality tax in place. The proprietor from the hotel or motel completes this one-page form monthly and submits it to the director of accounts for the county. I suggest we use the same form as the county.”
Brock added, “I was taking audit to mean we would have to go and confirm the numbers they are submitting to us.”
“Yes, that’s correct,” said Pirtle. “It’s mandatory. The levying body is charged with auditing the proprietor’s business to see that they are complying. Again, I see no reason, particularly if all the hotels and motels are in the corporate limits, that the city and county couldn’t have that audit performed by the same people at the same time. It would be logical for us to collaborate on that and avoid duplicating the expense, particularly when we are using the same form.”
The county will be contacted about collaborating to mitigate the expense for both governments.