Clarksville proposes 4% hotel tax to fund arts, tourism
CLARKSVILLE, Tenn. (WKRN) – This week, the City of Clarksville voted to create its own Arts, Culture, and Tourism Authority, with the hopes of prioritizing these activities even more for locals and visitors. Now, the city council is considering a proposed 4% hotel occupancy tax to fund the authority.
“Our city and its growth has pointed to the need to elevate the arts – all arts – not just performing arts, but everything from singer-songwriters to dance troops,” Clarksville Mayor Joe Pitts told News 2.
The new ACT Authority will be responsible for funding the Custom’s House Museum, the Arts and Heritage Council, and the Roxy Theater.
Lawmakers file multiple tax bills to help Tennesseans at the cash register
The authority would also be responsible for funding the Roxy Theater as it’s rebuilt into the new Performance Arts Center. Pitts told News 2 that certain laws prohibit municipalities from being able to provide “lending for credit.” This means taxes, including ad valorem taxes and sales taxes, can’t be used to fund debt for such projects.
“We had to get creative on the financing and this option was the best option for us. The occupancy tax would be a pass through and it would go directly into the tourism-development authority,” Pitts said.
The proposal would add to Montgomery County’s current 8% hotel occupancy tax, bringing the area’s hotel and motel occupancy tax up to 12%.
“This will give them a dedicated revenue stream and I’m believing that it will also give them more stability when it comes to funding, because right now they’re beholden to the city general fund and they’re competing with all the other services that we provide: public safety, parks, and just the general operations,” Pitts explained.
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The tax would generate an estimated $2.2 million for the ACT Authority per year.
On Monday, Feb. 26, the measure passed on first reading, with nine councilmembers voting in favor of the tax, one voting against it, and one councilmember abstaining, wanting more time to consider the measure.
The second reading will take place on March 7 when the city will vote to pass the tax or discuss the measure further.
Local Clarksville hotels and the Middle Tennessee hotel Association said they are opposed to the 4% tax proposal and sent News 2 a joint statement which can be found below:
“We are adamantly opposed to this privilege tax of 4%, this will make the city of Clarksville the highest tax rate in the state of TN. After speaking with the Mayor personally today he informed us that we would not have the opportunity to make public comments since that period is over at the same time we had no notice from anyone in the city. All we ask is that the city defer the measure and give us the opportunity to make our concerns heard.”
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