Local tourism officials fear they may get the shaft if municipalities are allowed to use a portion of the local innkeeper's tax to fund their budgets to supplement property taxes.
The innkeeper's tax is the sole source of funding for county tourism bureaus across the state, including the Putnam County Convention and Visitor's Bureau. Local hotels pay the tax each month based on revenues from guests who stay there.
Putnam County CVB Director Karla Lawless told members of the tourism board Tuesday night that she heard the innkeeper's tax was one of several options being considered by the legislature to supplement property taxes.
"I think their solution should be to fix that some other way," Lawless said of the legislation. "This bureau works very hard and what we do goes right back into this county."
On Tuesday, the tourism board learned that 2006 revenues for the bureau, derived solely from the innkeeper's tax, topped $216,000 -- up $3,000 from the previous year.
"This was again another banner year," Lawless said, noting that the tax represents $4.5 million in total sales for local hotels last year.
Lawless told the BannerGraphic that the bureau does not charge local hotels and tourist attractions for services which include travel brochures that are distributed throughout the United States each year. She said other bureaus charge for those services as a means to supplement the revenue that is generated by the innkeeper's tax.
Other groups besides the tourism industry are concerned about the idea of reducing municipalities' reliance on property taxes, including the towns and cities themselves.
The Indiana Association of Cities and Towns (IACT) has launched an initiative called "Hometown Matters" to discuss alternatives to property taxes.
According to the association's website, the local innkeeper's tax is, in fact, among several potential sources of revenue suggested to supplement property taxes. The others include local sales tax, supplemental income tax, and local food and beverage tax.
But all this worry may be for naught.
According to the bill itself, currently circulating through the Indiana Senate as SB 300, local sales tax, fuel tax, alcoholic beverage tax, tobacco tax and fireworks tax are the legislature's suggested options for supplementing property taxes -- not the innkeepers tax.
The bill was authored by Sen. Frank Mrvan, a Democrat from Hammond, on Jan. 11 and given a first reading before the Committee on Tax and Fiscal Policy.
Meanwhile, another bill circulating in the Indiana House may actually help, not hinder, the state's tourism industry.
House Bill No. 1166 would grant gross retail tax rebates as an incentive for new tourist attractions in the state provided they create new jobs, have a total project cost in excess of $5 million and can show that at least 25 percent of the visitors to the site will come from outside Indiana.
The bill was authored by Rep. William Cochran, a Democrat from New Albany, on Jan. 11 and was given a first reading before the Committee on Small Business and Economic Development.