Council considers TOT tax

The Ashland City Council is considering increasing the transient occupancy tax. On Tuesday night, the council agreed to begin this process by holding public meetings, which have not yet been scheduled.

"While some people don't like it, others appreciate it," Mayor John Morrison said, calling Ashland "the house that tourism built."

The transient occupancy tax, sometimes called Ashland's tourist tax, is charged to people who stay at overnight lodging accommodations, such as hotel rooms, bed and breakfasts and inns. Currently a 7 percent tax is added to lodging accommodations in Ashland, which netted the city $1,050,100 last year. A one percent increase would add $67,000 and a three percent increase, the maximum the council is considering, would add $202,000 to the figure.

But two issues were raised at Tuesday night's council meeting that may cause the council to think twice about this additional source of revenue.

One was opposition from the business owners who provide tourist accommodations.

David Runkle, President of Ashland's Bed and Breakfast Network, said his organization is opposed to the tax hike. ABBN represents 25 BB and Inns in Ashland, he said.

"We think there is sufficient money generated now for tourism promotion," Runkle, who owns the Anne Hathaway's Bed and Breakfast, said. "It puts a squeeze on how much can be charged to visitors. Any tax increase raises total amount visitor pays."

Another issue that will impact raising the tourist tax is that, under state law, 70 percent of any increase to this fee has to go toward tourism promotion.

City Councilor Kate Jackson said she is opposed to increasing the tax until there is a plan relating to how to spend the tourism portion new pool of money.

"We're clearly looking for money that is unencumbered," she said. "But this particular tax option is highly encumbered because of state law."

But her council colleague Eric Navickas, who supports a one percent increase to the TOT, said the economic and cultural development grants &

the mechanism the city uses to dispense the tourism tax money &

could be reworked. He said the city is dispensing more than $300,000 in tourism related grants already when it only has to spend $214,000 on tourism-related endeavors.

"I think entire business and hotel industry should get behind stimulating our economy," he said. "We already have a lot of grantees who are requesting more money than they are getting, for instance Independent Film Festival, Thrive and ScienceWorks."

One of the groups that will be requesting a grant from the tourist tax money is the ABBN. Runkle said his group is in the process of applying for tax-exempt status so they will be eligible.

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