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AUGUST 2 ELECTION - Proposed New Hotel/Motel Tax

SPECIAL ELECTION COMING UP ON TUESDAY, AUGUST 2

Holiday Inn Express in Grandview On Tuesday, August 2nd, Grandview voters will decide on a proposed new five percent (5%) Hotel/Motel tax to promote tourism in the community, which will, for the great majority, not cost residents any money.

The following are some commonly asked questions about the Hotel/Motel tax, which should help you become better informed about this important ballot issue.


Q. What is a Local Hotel/Motel Tax? It is similar to a sales tax charged by hotels and motels to their guests (those who rent the room for 31 days or less) on the gross price of the room or rooms. For example, if the room charge is $100 and the hotel/motel tax rate is 5 percent (5%), the hotel/motel tax generated would be $5.


Q. Who would be paying for this tax? Since the vast majority of Grandview residents already have housing available to them, they would generally not use local hotels or motels. The Hotel/Motel tax is normally generated by “out-of-towners”.


Facts to Consider - Hotel-Motel tax Q. What is the purpose of a local Hotel/Motel tax? It allows the City to benefit from out-of-town visitors who stay overnight as hotel guests and use local streets or benefit from other local services in the City while enjoying local activities or conducting business, just as the local business economy benefits. The room tax at local hotels/motels also operates as a continuing endowment to fund future activities and tourism, so it is self perpetuating in promoting tourism, increasing business, and paying for more local attractions and events.


Q. How can the tax be used? If the tax is approved by voters on August 2nd, 2011, it must enhance and promote tourism in the City, so it can be used for numerous types of tourist activities, activity centers, and marketing initiatives that would encourage visitors to come to our City.
The City could use the revenue to:
- Improve, maintain or create cultural or recreational facilities to support quality activities and events that would bring visitors to our City (e.g. farmers market, art shows, concerts, craft shows, festivals, sporting events and tournaments).
- Generate greater publicity for the City to help make Grandview more of a recreation or shopping destination for visitors from adjacent communities.
- Create more advertising for existing events, such as Music on Main or the Harry’s Hay Days Parade.
- Pay for the costs of additional events and activities for citizens as well as visitors to the city (e.g. special events, celebrations, sporting events, and attractions connected to Grandview’s 100th anniversary next year). 
- Support administrative costs for marketing, advertising, and event planning
- Fund historic preservation programs.


Q. Who can charge the tax? The following businesses would be required to charge the tax: a hotel, motel, lodging house, inn, or bed and breakfast establishment. A local hotel/motel tax may only be assessed against the use of a room that is ordinarily used for lodging for no more than 31 consecutive days.

Q. What is the proposed hotel/motel tax rate? Hotel/motel taxes are imposed at slightly different rates from one jurisdiction to another. Grandview officials are proposing a rate of five percent (5%) on all room charges derived from total charged occupancy, per occupied room, per night. Some of the rates for cities around us include: Kansas City ( 7.5%), Independence (6.5 %), Lee’s Summit (5 %), Blue Springs ( 6.5%), and Belton (5%).

Q. How much revenue would this tax generate? Based on the current number of hotel rooms and occupancy levels in the City, the tax would generate an estimated $120,000 a year.


Q. Will this tax contain a sunset clause? If not, then why not? No. The hotel/motel tax is intended for annual, recurring operating expenditures. Such annual, ongoing expenditures should be funded using annual, ongoing revenues. The City is not aware of any other city or county that has a sunset clause on its hotel/motel tax.


Q. How does the City receive the tax? The hotel customer pays the hotel occupancy tax. The tax is remitted by the hotel to the city on a regular basis (e.g. monthly, quarterly) as established by the City.


Q. Why was the hotel/motel tax chosen by the Board of Aldermen rather than some other type of tax or revenue source? Few people like taxes, but from a local perspective, a tax paid by tourists or visitors is probably the best type of tax to have; especially when the tax is used for civic improvement projects. The hotel/motel tax has been described by some as “The best tax you’ll never have to pay – at least in your own city!”


Q. How many hotels or motels are there in Grandview? At the present time, two, but the City has been approached by developers about the possibility of building more in the near future.


Q. What would happen if the hotel/motel tax isn’t approved by voters? The City has no ongoing source of funding to market the City and provide for special attractions and events that promote tourism and business activity generated by people from outside the City. The City’s limited operating revenues, as most citizens would expect, are used to provide basic services, such as law enforcement, emergency medical services, fire protection, street maintenance, building inspections, animal control, etc. Without a hotel/motel tax dedicated to marketing and tourism, these community events and activities will continue to be limited, or even non-existent. In difficult times such as these, cities can’t afford to spend money on such activities out of general revenues.

For additional questions or information, please contact City Hall at 316-4800 or send an email to suggestions@ci.grandview.mo.us .

Voters to Decide on the Imposition of a Hotel/Motel Tax


On Tuesday, August 2nd, Grandview voters will decide on a proposed new five percent (5%) hotel/motel tax to promote tourism in the community, which will, for the great majority of citizens, not cost them any money.


Several other cities in Missouri, particularly in the KC metro area, have already approved and now collect the tax and Grandview’s proposed five percent tax would still be the same or less than most of the cities. Currently, it is 6.5 percent in Blue Springs and Independence, 6% in St. Joseph, 7.5 percent in Kansas City, and 5 percent in Belton.


"This tax will be paid by visitors of Grandview and by some of our major employers who bring clients to the city," explained Economic Development Director Alan Kenyon, "It applies only to the room charges at local hotels and motels; it does not apply to restaurants or bars associated with the hotels/motels here."


If approved, the tax would generate an estimated $120,000 annually, based on the current hotel rooms and occupancy levels. With the possibility of additional hotel and motel rooms within the city limits, the revenue could grow in the future. Ultimately, it would be dependent on the number of out-of-town travelers staying at local hotels and motels and the total number of days the rooms are occupied.


City officials have outlined several specific ideas on how the money would be spent. These include creating a civic center downtown at 8th and Main, where the Farmer’s Market has taken place. Funds would also be used for marketing initiatives, like increasing promotional efforts for the City in general or enhancing key community events like Music on Main and the Harry’s Hay Days Parade. With the City’s centennial celebration coming up next year, it would allow the City to plan and carry out new events that would bring more visitors, musicians, artists, athletes, or other participants to Grandview.


"This is an opportunity to help promote tourism with virtually no tax impact on individual residents," said Mayor Steve Dennis. “And just about everywhere you travel these days, you generally pay this tax in other cities across America. This would help Grandview compete with other cities.”


If the hotel/motel tax is approved by voters in August, the tax would go into effect in January of 2012, and the City would begin receiving the tax receipts shortly thereafter.


Please mark your calendars and remember to vote on August 2nd!

Last updated: 8/4/2011 3:49:48 PM