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Room for a new tax?
City considers motel tax
Anil Bhakta has owned Scottish Inns on Sparta Street for 20 years. He has rooms starting at $48 a night.

McMinnville officials are considering a measure to levy at 3 percent tax on local motels in order to fund endeavors of the city’s newly created Tourism Development Board.
“We’ve talked about putting on a motel tax, which is going to require a resolution from us,” said Alderman Everett Brock, chair of the Finance Committee. “Even though it’s a general act, it’s much like a private act. The state has to have this stuff in-house by Feb. 8.”
Mayor Jimmy Haley says the city’s resolution will be sponsored by state Sen. Janice Bowling and considered by the Tennessee General Assembly during its next session.
“We’ll have to pass it as a resolution from the city of McMinnville and have it directed toward funding for our Tourism Development Board,” said Haley. “Then we can forward it to the General Assembly so she can sponsor the general bill so the assembly can pass it.”
Local governments are allowed by state statute to levy a local lodging tax of up to 3 percent, except Metropolitan Nashville-Davidson County, which can levy up to 6 percent total plus a $2.50-per-night fee, as long as the tax is used to preserve the economy and encourage tourism.
City attorney Tim Pirtle suggested committee members approve the 3 percent tax and send it to the full board for its consideration without specific wording for the resolution until he has time to review recently received information.
“I only have one caveat,” said Pirtle. “Rather than recommending a specific language that I just received this afternoon, the resolution should be recommended to the full board for adoption of the motel/ hotel tax and let’s take a closer look at the language between now and that meeting.”
The Tourism Development Board would be similar to the Industrial Development Board (IDB). While IDB focuses on industrial and retail recruitment, TDA would focus on promoting tourism. Its main powers would include the authority to hold title to property, to convey property, to lease property, and to sell property.
Interest has been shown to purchase the Blue Building property for tourism development.
Much like the city did with the Industrial Development Board several years ago to recruit jobs, McMinnville officials could deed the Blue Building property to TDB and that organization could enter into an agreement with the interested party.
The measure to levy a 3 percent tax was approved by committee members Brock and Aldermen Ben Newman and Ryle Chastain, with legal counsel generating the resolution for full board consideration Jan. 24.

Generating funds

As of Tuesday, here are the lowest available room rates at three area motels:

Best Western $69
Best Value Inn $55
Scottish Inns $48

• That translates to an average daily rate no less than $57. A 3% room tax would generate at least $1.72 per room, per day.

• If there were 15,000 rooms rented a year, an average of 41 per day, the tax would generate at least $25,800.