McMinnville officials could be facing an uphill battle to increase the city’s hotel tax greater than 2.5 percent.
“We pulled the occupancy tax resolution because counsel wanted to advise us of some other things that he thought we should be aware of,” said Alderman Everett Brock.
Presented was a letter from Senator Janice Bowling advising city officials that they could be held at 2.5 percent by state legislators, despite legislation that allows collection of up to five percent.
“The Tennessee Department of Tourism, the Tennessee Department of Revenue, the Tennessee Tourism Association, 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,” said Bowling.
Cities are allowed to collect, after Tennessee General Assembly approval, up to what the county collects. Warren County collects five percent.
However, said Bowling, the city’s request of three percent on Senate Bill 389 brought the total tax over the 17.25 percent threshold so the amount was lowered to 2.5 percent.
“Considering the amount of state sales tax and the five percent hotel/motel tax currently levied by Warren County, it was decided to amend SB 389 to allow the city of McMinnville to levy a hotel occupancy tax of up to 2.5 percent rather than three percent, in order to keep the total amount of tax levied upon those staying in a hotel or motel in McMinnville to under 17.25 percent.”
The letter was written as an explanation of why the amount was reduced and came on the heels of city officials expressing a desire to ask the state to increase the 2.5 percent given to five percent.
Bowling’s explanation was considered during a Finance Committee meeting. The discussion was tabled for further consideration.