Spencer Board of Mayor and Aldermen meeting unknowingly touches on controversy

By | July 5, 2018 1:59 pm

By Tony Mitchell – contributor

City of Spencer Mayor Mickey Robinson called the monthly meeting to order, on June 28, not realizing a possible controversial item lay in wait on his agenda.

Officially, the status of the item on the agenda was “no change.” But underneath this agenda item lies a subject of interest to many in the Fall Creek Falls area – Tennessee’s hotel/motel tax laws.

The Private Acts of 1984 gave Van Buren County the power to tax a hotel/motel stay at 7 percent. City of Spencer is somewhat different. Private Chapter number 50, signed into law in 2016, says “…16 percent shall be paid over to the trustee of the City of Spencer…” (reduced from 22.28 percent). The remaining 84 percent is paid to Van Buren County. In other words, the existing tax on a room in Van Buren County is 16.75 percent. This is broken down as 7.75 percent local county sales tax, 2 percent state sales tax, and 7 percent county hotel-motel tax.

Zeda Hillis, Spencer city recorder, explained it by displaying a tax worksheet showing various payments of the tax to the county. The total hotel-motel tax collected pays out as 5 percent to clerk’s fees, 16 percent to the City of Spencer, and the remainder going to Van Buren County. T.C.A. § 67-4-1406 requires hotel-motel operators to file a monthly tax return reporting their revenue.

The issue portrayed on the city board’s agenda is that Van Buren County is seeking financial compensation from the State of Tennessee because the state closed the inn and restaurant at Fall Creek Falls State Park, on April 1, 2018. Spencer wants its share.

Many business owners are disgruntled because none of this tax money goes to encourage tourism in Van Buren County. Shawn Romano, owner of Cozy Cottages, summed it up by saying, “It would help the county and local businesses to reinvest some of this revenue in promoting tourism. You’re going to get more business.”

For more information on the hotel/motel tax laws read Hotel-Motel Tax in Tennessee Cities (2012) by Ron Darden from MTAS Publications.

Other action taken by the city board was the closing of the public hearing on the city budget and approval of said budget. Then Robinson suggested the board accept bids from outside sources for mowing the city grass, although they already have a tractor to do that. Motion passed and carried.

Also discussed was a resolution to increase E-911 funding from $28,500 to $50,000. The resolution passed after some discussion of the increase. Also passed was a request for a $1,000 donation to the Annual Mountain Homecoming event, as well as funding options for paving city streets.

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