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Back You are here: Home News Local and State News Local Council To Consider Resolution Supporting Additional 1% Hotel Room Tax

Council To Consider Resolution Supporting Additional 1% Hotel Room Tax

By WILLARD KILLOUGH III
Managing Editor

CAROLINA BEACH - The Carolina Beach Town Council will consider a resolution at their upcoming June 11, regular meeting to support House Bill 553 to help generate additional funding for tourism promotion and beach nourishment projects.
According to Assistant Town Manager Ed Parvin, State Representative Ted Davis has asked if the Town would support the bill by adoption of a resolution.  The law would allocate an additional 1 % room occupancy tax with 50% going to the New Hanover County Tourism Development Authority (TDA) for travel and tourism promotion and 50% going to beach nourishment projects. Also called storm reduction projects.
According to the proposed resolution, the North Carolina General Assembly is considering a bill to modify New Hanover County's authority to levy an additional one percent room occupancy and tourism development tax.
In addition to the County sales tax of 7%, currently for the entire county there's a 6% room occupancy tax on all hotels, motels and vacation lodging. The first 3% collected is distributed with 60% for beach nourishment. The remaining 40% is used by the Tourism Development Authority (TDA) to promote travel and tourism throughout the county. The additional 3% collected in the unincorporated area is distributed for beach renourishment.
For Wilmington, there's a "Wilmington Convention Center District" where a 6% room tax is distributed to the Convention Center. Outside the Convention Center District, the first 3% is distributed at 60% for beach nourishment and the remaining 40% is to be used by the TDA to promote travel and tourism throughout the county.  These funds cannot not be used to plan, construct, operate, or maintain a civic center, convention center public auditorium or like facility.  The additional 3% collected will be used exclusively for the convention center.
For Wrightsville Beach, Carolina Beach and Kure Beach, each charge their own 6% room tax. The first 3% collected is distributed at 60% for beach nourishment and the remaining 40% is to be used by the TDA to promote travel and tourism throughout New Hanover County and shall not be used to plan, construct, operate, maintain or in any way promote a civic center, convention center, public auditorium or like facility. 
The additional 3% collected in each individual beach community is dedicated to establishing two funds each to be used exclusively for that beach; at least one-half of the tax collected is to be used to promote travel and tourism and the other fund is for TDA approved tourism related expenditures that are designed to increase the use of lodging facilities, meeting facilities or convention facilities or to attract tourists or business travelers to the area and includes tourism-related capital expenditures as approved by the TDA Board of Directors.
All hotels, motels, inns, short term rental cottages or houses, tourist camps or any other such short term rental accommodations must report their monthly sales to the County Tax Department. The proposed resolution would add an additional 1% room occupancy tax. Currently a visitor staying in Carolina Beach pays the 7% sales tax and a combined 6% room occupancy tax meaning if approved the total tax on a hotel stay could increase to 14%.
According to the proposed resolution, "The supported legislation will allow the levy of an additional room occupancy and tourism development tax of one percent (1%) of the gross receipts derived from the rental of any hotel, motel, inn, tourist camp, condominium, cottage, camp ground, rental agency, or other similar place within the county that is subject to sales tax imposed by the State."
The resolution states, "The proposal will modify the distribution of the proceeds of the tax" and, "The net proceeds of the occupancy taxes levied under this act shall be distributed as follows: (1) Travel and tourism promotion. – NHC shall, on a quarterly basis, remit fifty percent (50%) to the     NHC Tourism Development Authority to be used to promote travel and tourism. (2) Beach nourishment. – NHC shall use the remaining fifty percent (50%) for beach nourishment."
The resolution states, "The Town of Carolina Beach DOES NOT SUPPORT a cap on beach nourishment funds" and, "NOW, THEREFORE, BE IT RESOLVED that the Carolina Beach Town Council hereby requests that the North Carolina General Assembly approve legislation that would allow for the additional 1% room occupancy and tourism development tax, and, BE IT FURTHER RESOLVED that 50% of the additional 1% shall go to the New Hanover County Tourism Authority and 50% shall go towards beach nourishment in New Hanover County."