Tuesday, February 23, 2016

Cobb Hotel Tax Hike

NEW HOTEL TAX IN COBB COUNTY OPPOSED BY TAXPAYERS GROUP

AUSTELL, Georgia – The Cobb Taxpayers Association (CTA) announced today that it opposes a new $3 per room per night tax on hotels and motels in Cobb County. The new tax is scheduled for a vote of approval by county commissioners at their regularly scheduled meeting this evening at 7 pm. CTA opposes the new tax for the following reasons:

The new tax unfairly penalizes small hotels with lower rates and favors big hotels with higher rates. For example, with a room rate of $45, the percentage of total taxes would rise from 25.11% to 31.78%, whereas for a room rate of $350 per night, the rate would only rise from 15.43% to 16.29%. For an extended stay facility which charges $160 for a weekly stay, the new tax would impose a total tax of $78.40, or 49%!

It imposes an inequitable and unfair tax burden on lower income Cobb residents, who can only afford lower priced accommodations, whereas the tax will be hardly noticed by wealthier out-of-town guests who largely rely on their employers to pay for their rooms through corporate expense accounts.

Even without the new tax, the current Cobb Hotel tax is one of the highest in the country, with the average being 18% among America’s 150 largest cities. With the new tax, the average total tax burden on rooms in Cobb will be 23%, and up to 49% for the least expensive facilities.

The tax, as currently proposed, is discriminatory in that it is only imposed in unincorporated parts of Cobb, with cities such as Marietta and Smyrna being exempt in the hope that they “might” follow suit at some future date.

The tax will have a negative economic impact on the overall revenue and occupancy of small to mid-size hotels in Cobb; especially those in the Cobb County border areas. The County government should not be in the business of making it more difficult for this important segment of our business community to compete in the local hospitality industry.

While ostensibly, the new tax is being touted as promoting tourism in the County, it will to a large extent do the opposite by hurting those businesses who are directly involved in the tourist industry.

This tax increase would come on the heels of a $200 million occupancy tax increase imposed last year by the state legislature. Now is not the time for the Cobb commissioners to pile on with yet another tax increase.

By the county’s own admission, the use of the tax is fungible, open ended, and lacks transparency, where some of the money could go towards the new Braves stadium infrastructure, or “additional bleachers for a tournament game.” As such, it has all the markings of a slush fund, where the most well connected business interests receive the most benefit, while our neediest citizens, and those seeking to meet their needs are left to pay the freight. In this sense, the new tax is a transfer of wealth from the poor to the rich.

Businesses whose business it is to provide accommodations to in and out of town residents, are far better equipped to promote their businesses with their own resources, rather than turning them over to a County bureaucracy who may or may not use the new tax to their benefit. In all likelihood, the “benefits” of the spending will most likely flow to those businesses in the County that have the best connections with the Cobb Travel and Tourism office that will receive and disburse the funds.

“When it comes to raising taxes there is no shortage of imaginative ways to do so by the entrenched business interests in the County” said CTA chairman Lance Lamberton. “Hopefully there will be a majority of at least three commissioners who will see this for what it is, and vote it down at tonight’s meeting.”

The Cobb Taxpayers Association was established in 2005 to represent the interests of Cobb County taxpayers by promoting fiscal responsibility, lower taxes and less government spending.

For more information on CTA, go www.cobbtaxpayer.com

(http://cobbtaxpayer.us1.list-manage1.com/track/click?u=8de 73317a6fb1b88b1a3011c3&id=a4a67b4276&e=6f77b55756)



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