Bill passes North Carolina Legislature creating new hotel tax formula for Buncombe
ASHEVILLE — More money will go to Buncombe County projects and less to advertising after a bill passed the North Carolina Legislature on July 1 changing the way tax revenues of occupation are divided.
Prior to the passage of the local bill, the county hotel and other room occupancy tax dollars, which go to the Buncombe County Tourism Development Authority, were split 75%-25% between marketing and projects.
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Now the money will be split between 66% and 33%, with more going to the Tourism Product Development Fund, which funds projects and sites that can allow visitors to stay in the area longer.
Buncombe County’s fiscal year 2023 budget provides $46 million for the hotel occupancy tax fund.
“After years of delay, I am pleased to see the Legislature approve this phased reform of the hotel resort tax to invest more in community priorities and less in tourism advertising,” said Brownie Newman, Chairman of the Buncombe County Board of Commissioners. “This is an important first step in creating a more balanced economy.”
Some lawmakers who sponsored and voted for the bill took to social media to celebrate.
“Today is a day of celebration, and tomorrow we will get down to the hard work of reviewing the Legislature’s guidelines for occupancy tax bills so that more communities can benefit even more from these taxes,” said Senator Julie Mayfield on her Facebook page in July. 1. She and others sponsored the Senate bill before it was sent to the North Carolina House of Representatives.
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“For many, these changes don’t go far enough, and I hear that. But we have to start somewhere and this bill is that start,” Mayfield said.
“Glad to see this become law,” Rep. Caleb Rudow said on Twitter.
Mayfield thanked Senator Chuck Edwards, noting that he was “leading the charge” and that the bill would not have passed without his support.
TDA President and CEO Victoria Isley did the same.
“Explore Asheville and the Buncombe County Tourism Development Authority is grateful for the unwavering leadership of Senator Chuck Edwards in driving Buncombe County Occupancy Tax changes through Raleigh,” she said in a text to The Citizen Times. . “The teamwork demonstrated in tabling the first bill with Senators (Warren) Daniel and Mayfield, and the support of the entire local delegation has been encouraging. The Explore Asheville team and the TDA are ready to implement these significant changes on behalf of Asheville and Buncombe County for years to come.
She added that local hotel leaders “advocated for this change long before the pandemic hit.”
The bill’s passage comes the same day the TDA’s $30.6 million fiscal year 2023 budget goes into effect.
At its May 25 board meeting, the TDA discussed two possible budget scenarios, based on whether the new bill might pass.
The budget adopted on June 29 works on the 75%-25% model, but the TDA can modify it in July.
TDA board member Leah Wong, a member of the budget committee, said that if the bill passes, “we will come back to the board at the July meeting with a budget amendment consistent to the new law and its effective date.
“Our expenses are in no violation or over anything in this very short period of time, so we’re just going to enforce this law the moment it was passed,” Wong said.
Isley presented these two options to the Board of Commissioners on June 21. She said the TDA followed the legislation “with the expectation that it would be two-thirds / one-third (66%-33% split)”.
The TDA has worked within the bounds of the Occupancy Tax Act since 1983. Currently, Buncombe applies a 6% Occupancy Tax on hotels, vacation rentals and bed and breakfasts.
Andrew Jones is a Buncombe County government and health care reporter for the Asheville Citizen Times, part of the USA TODAY Network. Reach him at @arjonesreports on Facebook and Twitter, 828-226-6203 or [email protected] Help support this type of journalism by subscribing to the Citizen Times.