Owners oppose county plan for occupancy tax

by Doug Thompson

Bed & breakfast, rental cabin and campground owners spoke out Tuesday night against a proposed 5 percent “transient occupancy tax” for those staying in such establishments, saying such a tax would add a restrictive financial burden in economically-troubled times.

Four owners spoke against the measure at a public hearing before Floyd County Supervisors at the county administration building while one speaker, saying he was appearing as a “private citizen,” supported the tax.

The hearing, which drew 14 participants and observers, was over in less than 30 minutes, and the discussion highlighted a lot of confusion over the proposed tax.

Marion Smith, owner of Daddy Rabbit’s Campground, called the proposed tax unfair and said adding the tax would reduce visitors to the county.

With gas prices rising, she said, travelers to the area were already feeling the pinch and adding a tax might make them stay home or go elsewhere.

“I also object to the name of the tax,” Smith said, adding that the word “transient” insulted people who stayed in the county.

The county attorney said the word “transient” is part of the state’s name for the tax and the board was bound to use the legal name.

Ed Cohn, owner of Miracle Farm Bed & Breakfast, asked the board why it felt the need for adding a tax that he felt would hurt his business.

Board members don’t respond to questions during the public hearing, but after the hearing ended, board chairman David Ingram rose from his seat and asked Cohn to join him in the county administrator’s office to discuss the situation with him “in private.”

Cohn asked: “Why in private? Why not discuss it here in front of everyone?”

Ingram returned to his seat and told the audience that the financially-strapped county had to look for ways to increase revenue without always increasing real estate taxes.

James Garland, who said he owns a small cabin that he rents out, said his operation was “marginal” at best and felt a tax would be a breaking point.

“The cost of gas and utilities are already up,” he said. “This would be too much.”

John McEnhill, identifying himself as “a county resident,” said he supported the tax because it could help promote tourism in the county.

The proposed tax would allocate 2 percent to the county’s general fund and 3 percent for “tourism related” promotion.  Courthouse supervisor Jerry Boothe said the county could set the tax rate at 2 percent or up to five percent with anything above 2 percent going for tourism purposes.

Some speakers seemed confused about the tax and its use. One said he understood that only one percent went to the county and the state got the rest.

No representatives of any county organization involved in tourism appeared at the hearing. The Floyd County Chamber of Commerce did not attend.

One owner, speaking from the audience, asked the board to delay any implementation of the tax until the beginning of 2009, saying many establishments had already booked reservations at a rate that did not include any taxes.

Supervisors will consider the tax at their June meeting.