Despite protests from local industry, the Murfreesboro City Council adopted on first reading Thursday night, Jan. 17 an increase in the Hotel/Motel occupancy tax from 2.5 percent to 5.0 percent per stay.
Earlier in the week representatives from the Rutherford County Hospitality Association meet with council members, said Jacob Hall, president of the RCHA.
"We concluded that we would draw up a letter requesting an impact study to determine the effects of raising this tax, whether it be for the good or the bad," Hall said.
The RCHA also questioned the tax hike, which the city wants to use to help fund improvements to soccer facilities, when the members say they get more traffic from business conferences, according to an article in The Daily News Journal.
"Much of the business we see in Murfreesboro today is a result of these types of groups no longer being able to afford the high room rates in Nashville and had chosen our City due to the better value," the letter said.
A second reading to authorize the increase will go to Council Jan. 31 with an effective date of July 1, 2019. The tax has not been raised since May 1993
If the tax increase passes on second reading, it will bring it in line with Rutherford County. Davidson County's tax is set at 6 percent.
Rutherford County increased its Hotel/Motel occupancy tax to 5.0 percent in 2016, earmarked for fire service in unincorporated areas. Even with the increase, the typical room rate in Murfreesboro will still be less than rates in Nashville.
How the tax is used
Currently, the city allocates 30 percent of the estimated $1.7 million generated annually by the Hotel/Motel occupancy tax to the Rutherford County Convention & Visitor's Bureau (CVB), which promotes tourism, events and hospitality. Another 10 percent is allocated to the Stones River Trail maintenance costs. The remainder is portioned into the City's General Fund but used for Parks & Recreation facilities such as Adams Tennis Complex, baseball and soccer fields and other amenities that attract visitors to the community.
Under the proposed 2.5 percent increase, the funding allocation for CVB would change to 15 percent but the anticipated funding amount would remain the same. The percentage for trail maintenance would change to 5 percent but the anticipated funding amount would also stay the same with the overall tax increasing to 5.0 percent.
"The remaining 80 percent of the doubling of the $1.7 million in FY20 will go to the General Fund to promote tourism and secure economic development projects that enhance business relocation and employment opportunities," City Manager Craig Tindall said. "We think much of those funds should go toward helping the City fulfill an agreement to build a new soccer facility for TSSA by enhancing the Siegel Soccer Complex."
The Tennessee State Soccer Association voted Dec. 1 to accept the City of Murfreesboro as the site of its new facility based on a proposal from the city to expand the Richard Seigel Soccer Complex on Cherry Lane. The five-year lease calls for 15 soccer fields, including nine new synthetic fields, a 2,000-plus seat championship stadium, an indoor training center, classrooms and offices. Tournaments and activities are expected to generate 20,000 annual hotel room bookings.
"Groups and associations are expected to continue booking hotel rooms and conferences in Murfreesboro where the overall cost is less and access to restaurants and other amenities is quite accessible," Tindall added.
