Item Coversheet

Spotsylvania County
Board of Supervisors Agenda
Executive Summary



Meeting Date:
April 13, 2021
Title:
Public Hearing to Consider Increase in Transient Occupancy Tax Rate from 5% to 7%
Type:
Action, Public Hearing, Ordinance
Agenda Title:
Public Hearing to Consider Increase in Transient Occupancy Tax Rate from 5% to 7%
Recommendation:

Staff recommends that the Board holds a public hearing to gather citizen comment on the proposed increase in the Transient Occupancy Tax rate from the current 5% to 7%.

Summary:

The County Administrator’s Recommended Budget proposes increasing the Transient Occupancy Tax rate from the current 5% to 7%.  This increase is expected to generate $590,000 in new tax revenue to support community services within the General Fund budget. 

 

The Transient Occupancy Tax is charged to the patron renting a room (hotel) and is then held in trust by the establishment’s owner until the tax is due to the County.  It is not a tax to businesses.  This proposed rate increase would add $1.64 per night to the average cost of a hotel room in Spotsylvania County.   

 

The draft Transient Occupancy Tax ordinance including the changes necessary to exact the proposed increase is attached.  Also attached is the public hearing advertisement notice that appeared in the Free Lance-Star on March 30 and April 6, 2021.

 

If approved by the Board, the effective date of the increase would be July 1, 2021.

Financial Impact:
The proposed increase in the Transient Occupancy Tax rate from 5% to 7% is expected to generate $590,000 in new tax revenue to support community services within the General Fund budget. 
Staff Contacts:
Bonnie Jewell, Assistant County Administrator/Chief Financial Officer
Consequence of Denial/Inaction:
If the Board were to deny this proposal, revenue planned in the FY 2022 Budget would decrease by $590,000 and changes to the budget would be necessary.
ATTACHMENTS:
File NameDescriptionType
Meals_Tax_and_Transient_Occupancy_Notices_FLS_March_30_Edition.pdfPublic Hearing AdvertisementBackup Material
Ord._No._21-92_-_Sec._21-177-_Occupancy_Tax.pdfDRAFT Transient Occupancy TaxOrdinance