Occupancy-tax revenue recovers

Published 8:04 pm Thursday, February 26, 2015

Gross revenue generated by Washington’s 6-perccent occupancy tax increased nearly $13,000 in fiscal year 2014 when compared to the previous fiscal year, coming in at $222,208, according to figures provided by city and state officials.

The city realized $209,346 in gross revenue from the occupancy tax in fiscal year 2013. The gross revenue generated in each of the past two fiscal years is less than the $250,930 generated by the tax in fiscal year 2012, when the revenue increased after three consecutive years of declines, according to data from the city and the N.C. Department of Commerce.

Lynn Wingate, Washington’s tourism-development director, wrote in an email:

“The occupancy tax figures for fiscal year 2014 reflect a direct effort to market Washington to external areas. In March of 2013, we launched a new website. Travel spurred by the new site occurred during FY2014.

“The last two years show true figures, denoting an increase in visitation to our area. These numbers are not skewed by natural disasters that increased occupancy like prior years. We are now able to more truly see the impact of events and specific marketing efforts on occupancy.

“Several events that had an impact on occupancy in fiscal year 2014 included the girls fast pitch softball state tournament in July, the state championship pork cook-off during Smoke on the Water, and the East Carolina Wildlife Arts Festival just to name a few.”

Of the $209,346 in gross revenue generated in fiscal year 2013, the Washington Tourism Development Authority received $203,066, and the city received $6,280. Of the $222,208 in gross revenue generated in fiscal year 2014, WTDA received $215,542, and the city received $6,666, according to information gathered by Matt Rauschenbach, the city’s administrative services director and chief financial officer. The city receives 3 percent of the occupancy-tax revenue for providing administrative support to WTDA, which receives the balance of revenue.

For every $100 spent on lodging such as hotel and motel rooms, the city collects $6 in taxes.

Last year, the Magellan Strategy Group prepared a report on occupancy taxes in North Carolina.

“Very few counties and cities in North Carolina allocate occupancy tax proceeds to general fund expenses,” reads the report. “In fact, an analysis of the use of occupancy taxes shows that only seven counties and five municipalities in the state allocate any portion of their occupancy tax proceeds to what are typically considered general fund expenses.

“Some of the legislation that enables the use of tax revenue in this way has been crafted to allow smaller municipalities (particularly in coastal areas) to spend it on activities such as fire protection and waste disposal. Others allow for it to simply be used for any ‘public purpose,’ which can, of course, include a very wide range of activities. It is important to note that this analysis looks only at the legislatively enabled uses of occupancy taxes — the actual allocation of occupancy tax in a community may indeed vary from both the spirit and letter of the law.”

A significant amount of occupancy-tax revenues are used to fund programs and projects intended to bring more people for overnight stays to areas served by agencies like the WTDA. The WTDA allocates two-thirds of its annual revenue to promote travel and tourism and the remaining third on tourism-related expenditures, according to the Magellan report.

Beaufort County has no occupancy tax. Some people may pay two occupancy taxes — one collected by a county and the other collected by a municipality — while staying at a hotel or other lodging establishments. There are 95 cities, towns and villages in North Carolina that are enabled to receive revenue from occupancy taxes. Of that number, 18 do not currently do so. Nine of the state’s 100 counties (nor the municipalities in those nine counties) do not charge an occupancy tax. One of those counties has the power to impose such a tax but is not doing so.



About Mike Voss

Mike Voss is the contributing editor at the Washington Daily News. He has a daughter and four grandchildren. Except for nearly six years he worked at the Free Lance-Star in Fredericksburg, Va., in the early to mid-1990s, he has been at the Daily News since April 1986.
Journalism awards:
• Pulitzer Prize for Meritorious Public Service, 1990.
• Society of Professional Journalists: Sigma Delta Chi Award, Bronze Medallion.
• Associated Press Managing Editors’ Public Service Award.
• Investigative Reporters & Editors’ Award.
• North Carolina Press Association, First Place, Public Service Award, 1989.
• North Carolina Press Association, Second Place, Investigative Reporting, 1990.
All those were for the articles he and Betty Gray wrote about the city’s contaminated water system in 1989-1990.
• North Carolina Press Association, First Place, Investigative Reporting, 1991.
• North Carolina Press Association, Third Place, General News Reporting, 2005.
• North Carolina Press Association, Second Place, Lighter Columns, 2006.
Recently learned he will receive another award.
• North Carolina Press Association, First Place, Lighter Columns, 2010.
4. Lectured at or served on seminar panels at journalism schools at UNC-Chapel Hill, University of Maryland, Columbia University, Mary Washington University and Francis Marion University.

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