PANAMA CITY — Lower property taxes could be on the horizon thanks to a new business tax being considered by local officials.
Panama City Commissioners last week approved the first reading of an ordinance to lump lodging services — hotels, motels, camp sites and other short-term rental — into the city's existing 1% business tax, according to Grey Dodge, economic development senior manager for Panama City.
"The end goal (is to) collect more revenue through the merchant fee, (which) goes into the general fund, (to) reduce ad valorem as much as we can when possible," Dodge said.
Commissioners on Sept. 27 also approved a property tax dip that will go into effect at the start of the 2023 fiscal year on Oct. 1. The new rate of 4.7999 is slightly lower than the 2022 rate of 4.8999.
Like Dodge, Jared Jones, assistant city manager of Panama City, said continuing to reduce property taxes is something officials not only are passionate about, but actively working to accomplish.
"We're incrementally reducing ad valorem and using other equitable means of revenue collection to offset those reductions and still be able to deliver the same and enhanced services to our citizens," Jones said.
Dodge also said the proposed business tax expansion mirrors the 1% business tax of Panama City Beach, which currently also applies to lodging services.
Along with possibly allowing the city to drop its property taxes, the updated tax would create a more fair market for businesses that operate within both Bay County municipalities.
"We're working on being firm, fair and consistent," Grey said. "(PCB has) for as long as know have also included lodging in their definition of merchants. ... We have a lot of businesses that operate both out at the Beach and in town, (so) we want to make sure that we're consistent across the board."
Officials will vote on the second reading of the updated business tax during a Panama City Commissioners meeting on Oct. 11.
If approved, the expansion would generate more money for the city's general fund, which pays for a variety of services, including capital improvement projects.
"We believe (this is) a very fair way to collect revenue," Dodge said. "It's a consumption-based tax, so the more that you consume, the more tax is pay."
This article originally appeared on The News Herald: Panama City considers business tax expansion on short-term rentals