Small Town News

Economy

Hotel Tax Use Stirs Questions

The Hogansville Home News of Hogansville, Georgia

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One of the most complicated tax revenue producing streams is the hotel/motel tax and how such funds can be spent, and that surfaced during last Monday's city council meeting.

A tax added to the price of hotel, motel and other such establishments, revenue generated from the tax must be used to generate tourism.

This tax is very tightly regulated by the state.

IN HOGANSVILLE, the tax revenue was maintained and spent by the Downtown Development Authority. While no questions were ever raised on how the money was spent, earlier this year it was learned the DDA was not an approved agency for handling the tax money.

The LaGrange — Troup County Chamber of Commerce is an approved agency and Hogansville officials approved placing the tax revenue with the Chamber.

DURING Monday's meeting, council member Jimmy Norred asked about funding for the local radio advertising spots. The spots advertise Hogansville, but then typically promote individual businesses.

City Manager James Woods explained the tax money had to be used toward "tourism-driven" advertising as opposed to "shopper-driven" activity.

"It (funds) cannot be spent toward something that drives shopping," Woods said.

Norred then asked about the city funding some of the advertising spots, and Woods expressed concern over city money being used to subsidize private business. In addition, problems were noted in using tax revenue to advertise some businesses, but not others.

Woods said that merchants could develop a plan to tax themselves and use that for promotion of the businesses.

IN CONTRAST, the

Chamber is attempting to generalize the advertising and using the funding to bring visitors to Hogansville.

Woods told council members the hotel/motel tax in Hogansville generates about $16,000 per year, but the Chamber was spending about $50,000 in promoting the city this year.

Norred asked if the city could develop an entity authorized to administer the tax. Woods answered this could easily cost $30,000, which would not only consume the tax revenue, but would have to be funded by the city as well.

Council member Jean Crocker noted the Chamber had placed advertising for the city and the Hummingbird Festival in Southern Living magazine, and that had generated over 500 requests for more information.

"I think we're getting out money's worth," Crocker said.

Woods said the advertising in Southern Living had brought people from Florida and South Carolina to the Hummingbird Festival and Crocker added the Chamber ''did a good job reaching out to Hogansville." "It's not just the LaGrange Chamber any-more," Woods said. No action was taken regarding the hotel/motel tax.



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Original Publication Date: November 5, 2015



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