HomeMy WebLinkAboutAgenda - 10-11-2012 - 3
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ORANGE COUNTYBOARD OF COMMISSIONERS
CARRBORO BOARD OF ALDERMEN
JOINT MEETING AGENDA ITEM ABSTRACT
Meeting Date:October 11, 2012
Action Agenda
Item No.3
SUBJECT:
Carrboro’s Vision for Use of the New Town Hotel Tax
DEPARTMENT:PUBLIC HEARING: (Y/N)No
Visitors Bureau
ATTACHMENT(S):INFORMATION CONTACT:
Town of Carrboro
NoneLaurie Paolicelli, Visitors Bureau, 968-
2060
PURPOSE:
To receive information from Carrboro regarding itscurrent plansfor use of the
proceedsfrom the Town’s new hotel tax, and to discuss as necessarythe Town’s plans for use
of the tax proceeds.
BACKGROUND:
Since 1983, the North Carolina General Assembly has authorized many units
of local government to levy a room occupancy tax. In several instances, the General Assembly
has authorized both a county and a city within that county to impose an occupancy tax. The
rate of tax, the use of the tax proceeds, the administration of the tax, and the body with the
authority to determine how the tax proceeds wouldbe spent has varied considerably. The
county tax rate cannot exceed 6% and the city tax rate, when combined with the county rate,
cannot exceed 6%.
In 1991, theGeneral Assembly, in Chapter 392, Senate Bill 622 gave authority to the Orange
County Board of Commissioners to, by resolution, levy a room occupancy tax of up to three
percent (3%) on the gross receipts derivedfrom the rental of any room.
http://www.ncleg.net/Sessions/1991/Bills/Senate/PDF/S622v3.pdf
In 2001, by way of Session Law 2001-439, Senate Bill 92, the General Assembly gaveauthority
to the Town of Carrboro to levy an occupancy tax of 3%. The Town will enact its first
occupancy tax on the 142-room Hampton Inn scheduled to open in May 2013.
FINANCIAL IMPACT:
Using industry figures and projections, the Hampton Inn is expected to
generate the following revenue:
Based on an average daily rate of $100 over a one year period at a 6% tax rate (3%
Carrboro and 3% County), projected revenue is $186,588, or approximately $93,000in
tax proceeds to each jurisdiction.
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RECOMMENDATION(S):
The County Manager recommends thatthe two governing Boards:
1)receive information regarding Carrboro’s current plans for use of the proceedsfrom the
Town’s new hotel tax;
2) discuss as necessary the Town’s plans for use of the tax proceeds; and
3)provide direction, if any,to Town and County staff.