McMinnville officials are taking on an uphill battle with the state to increase the city’s hotel tax to more than 2.5 percent.
The measure was tabled for further consideration Oct. 10 after receiving a correspondence from state Sen. Janice Bowling advising them they could be held at 2.5 percent by state legislators, despite legislation that allows collection of up to 5 percent.
Bowling said the “Tennessee Department of Tourism, the Tennessee Department of Revenue, and the Senate Finance, Ways, and Means Committee prefer the total amount of tax paid by any hotel or motel guest in the state of Tennessee not to exceed 17.25 percent.”
Alderman Mike Neal made a push for the increase, saying the city being held at 2.5 percent is unfair because the average hospitality tax across the state is 4.5 percent.
The cap set by the state is not law, said Neal, and the total tax in other communities is already in excess of 17.25 percent.
“I don’t have a problem with them setting a 17.25 percent total combined, if that’s law,” said Neal. “That is not law. That is just a pie in the sky number. In fact, according to TN.gov, there are 12 cities that are charging 19.75 total percent right now. That’s no counting the Home Rule cities, of which there are 14, who by legislation can automatically charge 5 percent. I just want them to treat us all equal.”
City attorney Tim Pirtle agreed, “Nowhere is it written there is a limitation.”
Nashville will be asking the state for an increase in its hotel/ motel tax to fund mass transit.
“They are already at 6 percent to fund their mass transit,” said Neal. “They say they’ve got to have another three-quarter percent. I want the state to treat us all the same. To me, it doesn’t hurt to ask. If they want to turn us down, OK. I think we need to lay out our case in a resolution.”
Pirtle was instructed to generate a resolution for consideration.