Less money for Buncombe tourism advertising after occupancy tax bill passes NC Legislature

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Patrons enter the Haywood Street hotel in downtown Asheville on May 5, 2022.
Patrons enter the Haywood Street hotel in downtown Asheville on May 5, 2022.

ASHEVILLE - More money will go to Buncombe County projects and less to advertising after a bill passed the North Carolina Legislature July 1 altering the way occupancy tax revenue is divided.

Before the local bill's passage, the county's hotel and other room occupancy tax dollars, which go to the Buncombe County Tourism Development Authority, were split 75%-25% between marketing and projects.

More: Bill to change local tourism distribution formula entered in Raleigh

Now the money will be split 66%-33%, with more going toward the Tourism Product Development Fund, which funds projects and venues that can result in visitors staying in the area longer.

Buncombe County's 2023 fiscal year budget has $46 million slated to go toward the hotel occupancy tax fund.

"After years of delay, I am glad to see the Legislature approve this incremental reform of the hotel occupancy tax to invest more in community priorities and less in tourism advertising," Buncombe County Board of Commissioners Chair Brownie Newman said. "This is an important first step in creating a more balanced economy."

Some legislators who sponsored and voted for the bill took to social media to celebrate.

"Today is a day for celebrating, and tomorrow we will get down to the hard work of revisiting the legislature's guidelines for occupancy tax bills so that more communities can benefit even more from these taxes," Sen. Julie Mayfield posted on her Facebook page July 1. She and others sponsored the Senate bill before it was passed to the N.C. House of Representatives.

More: Buncombe TDA passes $30.6M operating budget, awaits state tweak to distribution formula

"For many, these changes do not go far enough, and I hear that. But we have to start somewhere and this bill is that start," Mayfield said.

"Thrilled to see this become law," said Rep. Caleb Rudow on Twitter.

Mayfield thanked Sen. Chuck Edwards, noting he "led the charge" and that the bill would not have passed washout his support.

So did TDA President and CEO Victoria Isley.

“Explore Asheville and the Buncombe County Tourism Development Authority is grateful for the steadfast leadership of Senator Chuck Edwards in shepherding the Buncombe County occupancy tax changes through Raleigh," she said in a text to the Citizen Times. "The teamwork demonstrated by filing the initial bill with Senators (Warren) Daniel and Mayfield, as well as the support of the entire local delegation was heartening. The team at Explore Asheville and the TDA stands ready to implement these important changes on behalf of Asheville and Buncombe County for years to come.”

She added local hotel leaders have "advocated for this change since long before the pandemic."

The bill's passage comes the same day the TDA's $30.6 million 2023 fiscal year budget goes into effect.

At its May 25 board meeting, the TDA discussed two possible budget scenarios, based on the possibility of the new bill passing.

The budget passed June 29 operates on the 75%-25% model, but the TDA can tweak it in July.

TDA board member Leah Wong, a member of the budget committee, said if the bill passes, "we’ll come back to the board at the July meeting with a budget amendment that complies with the new law and its effective date.

"Our expenditures are not in any violation or exceeding anything in that very short time period, so we'll just apply that law back to when it passed,” Wong said.

Isley presented these two options to Board of Commissioners June 21. She said the TDA had been tracking the legislation "with hopes that it would be at the two-thirds/one-third (66%-33% split)."

The TDA has worked inside the occupancy tax law limits since 1983. Currently Buncombe has a 6% occupancy tax on hotels, vacation rentals and bed & breakfast lodging.

Andrew Jones is 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 arjones@citizentimes.com. Please help support this type of journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: Bill passes NC Legislature creating new hotel tax formula for Buncombe