BREAKING NEWS

BREAKING NEWS

Hotel, motel tax revenue sees fluctuation

MARIETTA – Although Marietta’s hotel and motel occupancy has remained constant – around 85 percent in 2012 and 2013 – the hotel/motel tax revenue the local convention and visitors bureau splits 50/50 with the city has been fluctuating during the third quarter of this year.

“The bed tax has been on a roller coaster ride this year,” Jeri Knowlton, executive director of the Marietta Washington County Convention and Visitors Bureau, told city council’s finance committee Tuesday.

She said the CVB had projected a 20 percent increase in the bed tax revenue over last year and adjusted its budget accordingly, but that estimate hasn’t held true, and now the bureau is projecting a $35,030 shortfall in the amount it originally budgeted for 2013.

Knowlton said the CVB’s projected increase was based on the influx of shale oil and gas industry workers who have been staying at local hotels and motels, generating a significant rise in the bed tax collection over the last couple of years.

“Of course this shortfall is just a projection for the end of the year, and could change. We should see a pretty good (hotel/motel tax) check in November after October receipts come in,” she said.

Although revenues have fallen short of the CVB’s estimates, actual earnings in the third quarter have been above last year’s take, according to Knowlton’s report.

July’s receipts were $42,472 this year, up 10 percent from $38,431 in July 2012.

In August receipts did drop by 7 percent over the same time last year. August 2013 brought in $43,680, while August 2012 produced $47,328.

September 2013 showed a 40 percent increase over 2012 with $45,094 this year, compared to $32,067 last September.

“Total third quarter receipts were $131,247,” Knowlton said. “But the CVB had projected a total of $152,040 for that quarter.”

Her report indicated that occupancy was up in June, July and August.

“If the occupancy was up, why would there be a shortfall?” asked Councilman Tom Vukovic, D-4th Ward, who chairs the finance committee.

Knowlton attributed the tax revenue decrease to the number of extended stays by oil and gas industry employees at local lodging facilities.

“After a continuous stay of more than 30 days you don’t have to pay the city lodging tax,” she said. “So that’s a tax exemption for many oil and gas employees.”

CVB treasurer Mike Koker, who manages the new Fairfield Inn and Suites on Pike Street, said by law the hotel stops charging a bed tax after 30 days, and the hotel’s software is programmed to cut the tax after a 30-day continuous stay.

“We have about 14 to 18 extended stay rooms reserved at this time, out of 104 rooms at the inn,” he said. “But last year at this time we had around 40 extended stays.”

Councilman Harley Noland, D-at large, noted although the city bed tax drops off after 30 days at a local hotel, city code requires workers who temporarily reside in the city for more than 20 days must pay city income tax.

“Their employers should be paying city income tax if those workers are here for an extended period,” he said.

Knowlton reported that the number of room nights sold from January to August of this year is approximately 131,599.