Lexington’s Board of Mayor and Aldermen voted last night to ask the state legislature for a special law that will allow the city to institute its own hotel/motel tax for the purpose of funding tourism promotion. Lexington Mayor Bobby Dyer said the resolution would request that the legislature pass a law allowing the city to institute its own tax, but would not affect the collection of the current 5 percent tax on hotel rooms. “Currently there is a 5 percent hotel/motel tax for Henderson County,” Dyer said. “But all of that money goes to the county, not the city.” Dyer also said the city has undertaken several projects that promote tourism, but does not reap any added benefit in funding. “We’ve done several things that bring people into Lexington, like the fireworks display and the new soccer complex,” Dyer said. “Those are both funded by the city and, in the case of the soccer complex, we’ve brought 19 teams to Lexington since September but the only added benefit to the city was the sales tax on whatever those people bought while they were here. I just don’t think it’s right that the county reaps all of the benefits of the hotel/motel tax when the city is spending the money to draw people to Lexington.” Dyer said if the legislature approved the city’s request, the city could then institute its own 5 percent hotel/motel tax on top of the county tax and use that added revenue to help fund tourism promotion. “Right now, everything we spend to promote tourism has to come out of the general fund,” Dyer said. “If we are able to implement this tax, it will create a fund that we can draw from before going into the general fund for those types of projects and promotions.” Dyer added that he didn’t expect the tax to generate a large amount of money, at least not at first. “We’re not talking about a huge amount of money, but whatever we collect will allow us to keep that much more money in the general fund and over time, as tourism increases, so will the amount of money we collect,” Dyer said. Dyer also stressed that the tax would be in addition to the county tax, and will not affect the county’s income. “This won’t cut into what the county collects at all. It will simply be an additional tax collected on hotel and motel rooms rented in the city of Lexington. It won’t put any strain on the county or on local taxpayers,” Dyer said, “and it’s still only 10 percent total, as opposed to Jackson or Nashville, where that tax is usually around 17 or 18 percent.” The money collected can also only be used to cover costs associated with promoting tourism. Alderman Jeff Griggs asked if the money would be used to pay any salaries or other expenses. “Only if those items are directly connected to promoting tourism,” Dyer said. “I wish we could do it differently. I wish we could just put that money in the general fund but I think in order for the Legislature to seriously consider approving the request we’re going to have to show that we’re asking for the money for a specific purpose.” The board voted unanimously to approve the resolution, which Dyer said will next be taken to Lexington’s state representative and state senator for submission to the Legislature.
