TN may stop raising hotel taxes to fund special projects

By Chris Butler | Tennessee Watchdog

NASHVILLE — Tennessee lawmakers may decide next year to do something about county officials singling out local hotels to pay more tax revenue to fund special projects.

State Rep. Mark Pody, R-Lebanon, had little to offer beyond that, but he did say it’s too late for this year’s General Assembly to address the matter.

Whether legislators do anything at all greatly depends on this fall’s House and Senate elections, Pody said.

“My understanding is that there is going to be legislation next year to even forbid this from happening again,” Pody told Tennessee Watchdog.

“There’s talk to prevent those kinds of exceptions that say, ‘This law applies to ‘everybody-except-me’ type legislation, so I think that is going to be a tougher standard in the years to come,” he said.

“But it’s totally up to the voters. Talk about what might happen next year is very premature.”

Wilson County Mayor Randall Hutto last year told Tennessee Watchdog local officials single those out businesses only because state legislators let them.

“Wilson County did not create that hotel-motel tax,” Hutto said. “It was created by the state of Tennessee.”

As previously reported, Wilson County commissioners wanted to raise the hotel-motel tax to pay for a new Ag Expo Center at the county fairgrounds.

The Memphis City Council, meanwhile, is using $30 million of tax revenue from hotel patrons to build a new Bass Pro Shops in the long-abandoned Memphis Pyramid structure.

Memphis City Councilmember Myron Lowery told Tennessee Watchdog last year that tax revenue from tourists isn’t tax revenue at all.

“If you want to call the tourists who come here and pay our local taxes as taxpayers then, fine, that’s your interpretation,” Lowery said. “Here in Memphis we call it taxpayer money only when it’s taken from the taxpayers who live in our local area.”

Nashville officials, meanwhile, are always quick to point out that tax revenue to pay for the new $585-million Music City Convention Center came from tourists, not residents.

As Tennessee Watchdog reported last week, a series of bills in the Tennessee General Assembly that sought to increase taxes on hotel and motel patrons in various counties and cities — sponsored mostly by Republicans — appear dead for the year.

By law, these city and county officials can’t impose these kinds of taxes without legislative approval.

Local Government Subcommittee members last week killed bills that would have raised hotel and motel taxes in Wilson County, Columbia, Spring Hill, Lewis County and Fayetteville.

“If this is something our county wants then, they need to find a way to fund it with county funds,” Pody said.

Contact Christopher Butler at chris@tennesseewatchdog.org. or follow him and submit story ideas on his official Facebook page.