Sevierville approves taxes on hospitality

Revenues will fund tourism promotion
Jun. 05, 2013 @ 11:13 PM

The city’s Board of Mayor and Aldermen approved, on third and final reading, two new hospitality taxes and the decrease of a third, making restaurants and amusements in the city a little more expensive.

At Monday night’s meeting, residents voiced their concerns over the tax ordinances, which add a two-percent restaurant privilege tax and two-percent amusement tax, and decrease the lodging tax from three percent to two percent.

Larry Guerin, of Sevierville,  asked whether the revenue from these new taxes had already been calculated in the upcoming budget. It had. Finance Director Lynn McClurg said the incremental tax amounted to a net of approximately $2.3 million, 89 percent of which will be put back into tourism promotion and tourism-related expenses.

After previous meetings, city officials assembled a document to spell out the details of the taxes, including how much revenue it will generate and where the money will go.

The document, which is displayed on the city’s website, states that the funds may be used for increased television exposure in crucial markets, increased print advertising in national publications and newspaper inserts, among others.

At the meeting, Guerin said most of the city’s restaurants rely on local business, rather than tourists.

“I would beg to differ,” Mayor Bryan Atchley said. “Most of the restaurants you see up and down the Parkway, if they didn’t have tourism traffic, they wouldn’t be in business.”

Guerin noted that many of the tourists who come to the area choose to come because of the low prices. Also, Guerin said, many residents may choose not to eat out now.

“Who’s going to be able to afford those taxes?” Guerin said.

Under the new restaurant privilege tax, a $50 restaurant bill will increase by $1.

The ordinances passed with four votes in favor, none against. Alderman Travis McCroskey was absent from the meeting.

The board also approved:

  • The second reading of an ordinance appropriating funds for the various departments, capital projects and Public Building Authority of the city for the fiscal period July 1, 2013 – June 30, 2014, approving fee schedules and pay plan, and establishing a property tax rate for tax year 2013
  • A contract renewal with the Tennessee Department of Transportation for Global Navigation Satellite System
  • The purchase of various pieces of fire equipment
  • GovCollect purchase and agreement
  • Amending the purchasing policy to define “fixed assets” as having a value of $1,000 or more for accounting purposes
  • Expenses in excess of $5,000 for Penn Valley Pump Co., Inc., in the amount of $21,095 and University of Virginia for Senior Executive Institute Program in the amount of $6,500