Council increases Nashville hotel room tax

Money will go into fund for attracting tourists to major events By MICHAEL CASS • Staff Writer(Tennessean) • August 20, 2008 A night in any Davidson County hotel room will cost an extra 50 cents to create a pool of money to help Nashville market major events to attract tourists, the Metro Council decided Tuesday. The decision upset many hotel owners and operators, who said the additional tax would hurt their business. Metro already charges a $2 room tax to help pay for a proposed downtown convention center, along with the standard hotel/motel tax. Kirrit Bhikha, owner of Alexis Inn and Suites at the Airport, said the tax rate for a $50 room is already higher than the rate for a $150 room, as a percentage of the overall cost. Adding a flat tax won't address that inequity, Bhikha said. "It doesn't make sense." The National Business Travel Association says Nashville has the second-highest tax rate for travelers in the nation. But supporters of the new tax said it would allow the city to help the organizers of large tourist-magnet events, such as the CMA Music Festival and the Music City Bowl. Events must have a "cumulative total economic impact" of more than $5 million to qualify for assistance. The tax is possible because of a state law passed earlier this year. "It's a simple question," Councilman Greg Adkins said. "We have two options. We can tax tourists, or we can tax residents in your districts." Adkins said the council could revisit the issue "if it has the impact of shutting down hotels, which no one wants." The "event and marketing fund" will be administered by a committee appointed by Mayor Karl Dean. The Metro finance director will have to approve any expenditures. Lobbyists for the bill said the committee's records would be public.