Coffee County can now charge up to 2.5% hotel/motel tax countywide.
In the two cities, that rate would be in addition to the existing occupancy tax rates – 5% in Tullahoma and 6% in Manchester.
In rural Coffee County, the hotel tax would be applied for the first time.
There are currently no hotels in the rural part of the county; however, according to the law (T.C.A. 67-4-1401), “hotel” is defined as “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, lodgings or accommodations are furnished to transients for consideration.”
It is not yet clear if county officials plan to apply the new 2.5% county tax rate to camp sites, including those offered at the Bonnaroo Music and Arts and Exit 111 festivals.
Coffee County officials are still researching the possibilities related the new 2.5% hotel tax, according to Coffee County Mayor Gary Cordell.
Cordell does not expect the county to start the occupancy tax prior to July 1.
The Tennessee General Assembly approved the rate, amending the current law to add Coffee County to the counties allowed to levy hotel taxes.
Gov. Bill Lee signed the new bill, sponsored in the Senate by Sen. Janice Bowling (SB0567) and in the House by Rep. Rush Bricken (HB0630), on April 25.
“The legislation goes into effect immediately, but it takes some time to communicate to all the hotels and motels in the county,” Bricken said. “The county administrative offices will need to do that. They will probably specify a beginning date, say July 1.”
Though in January the Tullahoma Board of Mayor and Aldermen voted to oppose the new tax rate being applied in the city, the newly state-approved tax will be collected from hotels in Tullahoma, according to Bricken.
“The tax applies to all hotels and motels in the county, so city’s hotels and motels are included; no opting out by cities,” Bricken said.
Taxing camp sites
Bricken added he is still researching the possible implications of the new bill.
“I don’t know if Bonnaroo camping is included,” Bricken said.
The News reached out to Coffee County Attorney Bob Huskey to ask whether the new bill allows for collecting occupancy tax from the camp sites; however, Huskey did not reply before press time.
County officials have not provided a definite answer as to whether another vote by the county commission is necessary in order for the new tax to take effect.
Public Information Officer for the Tennessee Comptroller of the Treasury John Dunn said in January that when a private act comes before the legislature for a municipality to increase its hotel-motel tax, it requires the local governing body to approve the increase with a two-thirds majority vote. Dunn added “this occurs after the legislature passes the private act.”
According to the bill approved by the state, the revenue generated by this occupancy tax must be used to support local tourism and economic development.
A resolution adopted by a two-thirds vote of the county commission “must set forth the manner of collection and administration of the privilege tax,” the bill states.
“It is estimated the additional tax will raise about $280,000 [per year],” Bricken said.
This estimate does not include taxes collected from camping sites.
Elena Cawley may be reached via email at email@example.com.