Looking to increase revenue for economic development and tourism, the Crossville City Council unanimously approved a resolution Thursday afternoon requesting a 3-percent hotel-motel tax.
In order to legally collect the tax, the city has to request the Tennessee General Assembly to allow a change to the city charter and to make and exception to a state law that does not allow a city and county to collect a hotel-motel tax at the same time.
State lawmakers have recently granted exceptions to the law, including at least six times last year and at least 17 times since 1988.
Dave Padgett with Crossville’s Hampton Inn said the increase could potentially hurt his business. The county currently has a 7.5-percent hotel-motel tax and the sales tax is at 9.25-percent.
“This puts us at 20.25-percent. That’s one of the highest in the state, if not the highest,” Padgett said. “When you are looking at traveling ball teams, we’ve been losing some of those to Cookeville. When you’re doing 10 to 15 rooms a night for four nights, that will certainly come into consideration as our tax rate.”
City officials argue that the tax is meant to bring more people to Crossville to stay. Based off the county’s hotel-motel tax, the city’s 3-percent tax is estimated to bring $275,000 of revenue to the city, which would be earmarked for economic development and tourism purposes.
“This tax will be used for the increase of tourism to provide more events and functions so we might bring in more tourists and individuals to stay in this area,” Vice Mayor J.H. Graham said.
The resolution now heads to Nashville for state lawmakers to consider. If approved by the Tennessee general Assembly, it must be approved by the city council.