Tourism tax headed to state officials
MONTICELLO — A town resolution to pass a two percent tax onhotel/motels and prepared food, commonly known as the “tourismtax”, was sent to the state Legislature last week.
Local legislators are expected to make the resolution into abill for consideration this session, according to Mayor DavidNichols.
The tax would add two percent to taxes paid by the customer tofund economic development.
“We are going to use this money for the enhancement of parks andrecreation,” Nichols said.
The city invited town business people who would be effected bythe new tax to attend a meeting for input and feedback. Nicholssaid four of the 13 businesses invited attended and following themeeting most were not upset with the tax.
“There are two common misconceptions about this tax and after wetalked about them, I think almost everyone was satisfied,” hesaid.
Nichols said the first misconception is that the business ownersare the ones taxed. The mayor said the tax is actually passed on tothe consumer and the business is not effected, other than having alittle additional paperwork when submitting taxes.
The other misconception, he said, is that the state receivessome of the money. In actuality, 100 percent of the funding isreturned to the town.
“My preliminary figures show that the tax will bring $30,000 ayear,” Nichols said.
Monticello is also attempting something rarely, if ever, donewith a tourism tax in Mississippi. Plans are to split the fundinggained from the tax 50/50 with the county, up to $25,000. In otherwords, if the tax generates the estimated $30,000, both the countyand town would receive $15,000. However, if the tax should generate$60,000, the town would receive $35,000 and the county $25,000.
“I’ve never heard of a city giving a county part of the money,”Nichols said. “I’m not sure if anyone has done it before.”
The mayor said the city’s portion of the funds would be used toenhance Atwood Water Park. Options being considered include cabins,paved camper slits and a wiring upgrade, among others.
The county could only use the funds for the building,maintenance and operation of the news sports complex on F.E.Sellers Highway south of Monticello.
“Both of these projects will bring other people into town,”Nichols said. “These people will need to eat and that will increasethe restaurants’ business. This is a true economic tool.”
The mayor added that the tax is already in use by manyMississippi towns, including all the big cities, and has notprevented anyone from eating or lodging at theirestablishments.