Hotel tax deal
By Steve Herring
Published in News on August 5, 2015 1:46 PM
sherring@newsargus.com
An agreement that clears the way for Wayne County to levy a 1 percent countywide hotel occupancy tax was unanimously approved by Wayne County commissioners on Tuesday.
The Mount Olive Town Board approved the deal at its meeting Monday.
The authority to enact the tax must first receive state approval. The bill to grant that authority has passed the House and is in the Senate State and Local Government Committee.
Along with the tax, the bill would create the Wayne County Tourism Development Authority that would be charged with how the money is spent to promote travel and tourism in the county.
An agreement between Goldsboro and Wayne County for the construction of a city sports complex and the county's agricultural and convention center is dependent on the tax being enacted.
The revenue from the 1-cent tax can only be used for marketing related to travel and tourism only and not construction of either facility.
Once the local bill passes, there are still two more steps to the process, Wood said. The first is levying the tax by resolution. The second is creation of the authority and appointing people to serve on it.
Under the agreement, all proceeds from the tax will be turned over to the authority.
The deal requires the authority to separate the net proceeds of the tax revenues generated in Mount Olive into two separate accounts -- one for Mount Olive and one for Wayne County. Seventy percent of the total amount collected in the town would go to Mount Olive and 30 percent to the county.
The revenue will be held as reserve funds for the town until such time as the town submits a request to the authority for the use of a portion or all of the funds for the promotion of travel and tourism within the town.
Any such request must be documented as a legal use under the county's room occupancy tax local legislation and supported with invoices, contracts, or similar evidence of valid expenditures, Wood said.
It is "expressly understood and agreed" that Mount Olive will not be eligible for any funding from the existing 5 percent room occupancy tax already levied by Goldsboro, since no lodging establishment in Mount Olive will have paid any of that tax, he pointed out.
The agreement will remain in effect as long as county levies the 1 percent room occupancy tax. The agreement can only be amended by mutual approval by the town and county.
"I want to stress so we can be clear about this, we have, I believe, 11 hotels in the city of Goldsboro," Wood said. "They currently pay the 5 percent hotel/motel tax, room occupancy tax that Goldsboro imposes. That goes to their travel and tourism board. There are no motels in Mount Olive or anywhere else in the county that pay that because that is a citywide tax, not a countywide tax.
"The only hotel outside the (Goldsboro) city limits in Wayne County is the Sleep Inn in Mount Olive. So this agreement affects the proceeds from that one hotel. So what we are saying is they (Mount Olive) would get 70 percent of the proceeds that come that hotel or any future hotels that may be within the corporate limits of Mount Olive."
Some commissioners questioned what would happen if other motels are built in the county.
"I hope that the people involved in this negotiation understand that this may set a precedent for other motels/hotels that may be built outside the city limits of Goldsboro," Commissioner Ray Mayo said. "If you remember we have (U.S. 70 Bypass) interchanges that in the future may develop.
"So I am hoping this will be acceptable for future development of hotels and motels. I hope that was taken into consideration as this agreement was reached."
The agreement is an exception for Mount Olive only, Wood said.
"If another motel is built anywhere in the county, whether it is inside Goldsboro, outside Goldsboro, anywhere except Mount Olive, that money will go to the county, which will go to the Wayne County Tourism Development Authority to spend on county-wide marketing," Wood said.
The 1 percent countywide tax will carry out the original intent of the county's agreement with Goldsboro for the sports complex and agriculture and convention center, Wood said.
"But because we originally envisioned we would have a six-percent city tax we will need to go back and amend that agreement to reflect that," Wood said. "From that point I think we are ready to proceed on. But we will need to get that amendment before you."
Getting the total up to 6 percent was done to allow the revenue to be divided into thirds between Goldsboro, the county and travel and tourism.
The county could use its portion for the agricultural and convention center.