Hotel tax, Bonnaroo

Pictured is part of the campground area at the 2018 Bonnaroo Music & Arts Festival. Bonnaroo organizers are concerned that a new 2.5% occupancy tax that the Coffee County Government is attempting to implement would apply to festival campers. The County Commission delayed the vote.

With questions about the legality of the presented resolution on Tuesday, the Coffee County Commission postponed voting on implementing 2.5% occupancy tax countywide.

The state approved on April 25 that Coffee County can now levy 2.5% hotel tax, also referred to as occupancy or lodging tax.

According to Coffee County Mayor Gary Cordell, the commission didn’t initially intend to tax camping in the county, including camping at Bonnaroo Music and Arts Festivals and the new Exit 111 Festival.

The resolution, as presented on Tuesday, excluded the festivals.

Commissioner Ashley Kraft voiced concerns about the legality of that exclusion and suggested removing the text that would make an exception for the festivals. Kraft said the rate must be applied equally to all accommodations defined as “hotel” in the county.

The commission agreed to study the legislation further and postponed voting on it until June. 


Is it legal?

Questions have arisen about the legality of a resolution that excludes camping from taxation.

The definition of “hotel” is very broad and includes camping.

The Attorney General has already issued an opinion that the hotel tax must apply to all accommodations under the definition of “hotel.”

“Hotel” is “any structure or space, or any portion thereof, that is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes” and includes “any hotel, inn, tourist camp, tourist court, tourist cabin, motel or any place in which rooms, lodging or accommodations are furnished to transients for consideration,” according to the law (T.C.A. 67-4-1401).

According to Tullahoma City Attorney Stephen Worsham, camping offered at the festivals falls under the definition of “hotel.”

“… I think the controlling words are the words ‘space,’ ‘occupied or intended or designed for occupancy,’ ‘sleeping purposes’ and ‘accommodations,’” Worsham said.

On Nov. 10, 2004, the Attorney General issued an opinion No. 04-163 about the application of the hotel tax rate in Campbell County, stating, “While the county commission may set the rate of the tax at any amount up to 5%, it must apply the rate to all accommodations that have been defined by the Act as “hotel.”

When commissioners asked Coffee County Attorney Bob Huskey on Tuesday if camping offered at the festival falls under the definition of “hotel,” Huskey said his opinion is that it doesn’t and that camping at the festivals can be excluded.

Huskey added that any opinion could be argued though. If the commission passed the resolution and didn’t apply the tax rate to festivals, an individual or an organization could question the legality. But even if someone filed a lawsuit, it wouldn’t be very costly to the county, said Huskey.


Bonnaroo’s response

Bonnaroo representative Sam Reed attended the meeting on Tuesday, and encouraged commissioners to strongly consider the benefits the festivals bring to the county before applying any additional tax to them.

In a statement sent to The News, Jeff Cuellar, who also represents the festival organizers, said that Axis Nation, organizer of the Bonnaroo and Exit 111 Festivals, is “neutral” on the resolution presented on Tuesday as drafted.

According to Cuellar, festival representatives first learned of this tax when it was introduced at the State Legislature by St. Rep. Rush Bricken and Sen. Janice Bowling.

“We were assured that the 2.5% tax would apply to existing hotels and motels in the county and not to camping that is incidental to Bonnaroo and Exit 111 Festivals,” Cuellar said. “Even though we are the largest purchaser of hotel room nights annually across the county for our staff, Axis Nation, did not oppose the tax at the state level based upon these assurances.

“Last week, we learned that there was a potential ‘unintended consequence’ of this tax being extended not only to existing hotels and motels, but also potentially to all Bonnaroo and Exit 111 attendees because of an overly broad definition of ‘hotel’ in the state code.”

At that point, organizers reengaged with county officials, Bowling and Bricken and “were again assured that this was not the intent of the legislation,” Cuellar said.

Festival organizers encouraged county officials to keep the text excluding festivals from having to pay the tax in the resolution.

“Without this language, Axis Nation would be strongly against this new tax that could, in effect, act as a ‘Bonnaroo tax’ that could inadvertently apply to every attendee of events at Great Stage Park.”

Cuellar said that the county greatly benefits from the festivals.

“Each year, the Bonnaroo festival brings in roughly $1.2 million in sales taxes to Coffee County which represents about 25% of the county’s sales tax revenue for the entire year,” Cuellar said. “With the addition of Exit 111 Festival, the long considered second festival on the Great Stage Park site, the sales tax win for the county will only be multiplied.”

To begin levying the occupancy tax, a resolution adopted by a two-thirds vote of the county commission must be approved.

The commission is expected to vote on the issue in June.

Elena Cawley may be reached via email at