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Voters to decide fate of hotel/motel tax
Both the Osage City Council and the Mitchell County Board of Supervisors earlier this year passed resolutions that put a proposed hotel/motel sales tax on the ballot for the November 7 general election. They are two separate measures (one for the city and one for the county).
If passed by simple majority of voters, the city of Osage would be allowed to tax hotel guests at a rate "not to exceed 7 percent." This means that the city and county will wind up receiving 5 percent of the taxes from room charges at the Super 8 Motel. Two percent would be remained locked in for the local option sales tax and for the schools. The proposed hotel/motel tax may also be assessed to the Walnut Manor and Barrett House Bed & Breakfast establishments in Osage.
If passed at the county level, the budget would see some additional tax revenue from those staying at the Staff Motel and Lounge, which is technically located outside Osage city limits.
Supervisors say that if the City of Osage does not pass the measure, they will not implement the tax at a county-wide level, which would end-up taxing only the Staff Lounge. The Blue Belle Inn in St. Ansgar would not be affected in any scenario, because the town's council chose not to put the measure on the ballot.
If passed in Osage, at least 50 percent of the revenue generated from such a tax, as mandated by the State of Iowa, must be used for tourism. Currently, patrons who stay in local motels and hotels pay 7 percent tax on room charges, which would increase to 12 percent next year if the measure passes in the fall. County officials said they would dedicate 100 percent of any extra revenue to the promotion of tourism.
"I'm normally not an advocate for implementing new taxes," said Mitchell County Board of Supervisor Chair Stan Walk, who had been pushing to get the measure on the ballot. "But most people who stay in our hotels and motels are not local residents, so we wouldn't be taxing our local citizens."
There are critics of the proposed tax, however. In several recent letters to the editor in the Press-News, writers have criticized the measure, saying it would just be taxing family and friends of local people who come to town to visit. They see no need to implement any more taxes in Mitchell County.
Walk, however, said the benefit of the measure is that local people are not taxed. He added that hotel/motel taxes are now common across Iowa, and Mitchell County is one of a handful of counties that has not yet implemented it. He added that now is a perfect time to garner some extra funds to promote Mitchell County.
"There are going to be two great opportunities to promote this area that the funds could be used for," concluded Walk.
Story created Nov 01, 2006 - 09:38:51 CST.
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