By Michelle Price
UCBJ Managing Editor
COOKEVILLE – The Cookeville City Council voted unanimously Thursday to request the Tennessee General Assembly exempt the city from the requirements of TCA §67-4-1425 (a)(2) and allow the city to adopt a lodging tax of up to 3 percent. The tax revenue would be allocated for tourism and/or economic development purposes.
“The resolution tonight was simply to ask the state to exempt the city of Cookeville so we can then consider an ordinance that would pass a 3 percent hotel/motel tax to go with the 7 percent that is there, that goes to the county,” explained Cookeville Mayor Ricky Shelton. “This is a little bit of a process, but this is the first step in that process.”
TCA §67-4-1425 prohibits a city from adopting a tax if the county has already adopted a lodging tax. Typically, the General Assembly has capped the lodging tax at 10 percent.
Putnam County currently has a lodging tax of 7 percent.
In recent years, the General Assembly has made many exceptions to the law but usually requires those tax revenues to be used solely for tourism and economic development.
“I think we need this in order to promote tourism,” said Councilman Chuck Womack. “The three things Cookeville has is our location on the interstate, Tennessee Tech and our scenic beauty, and we need funding for our chamber and other things to promote tourism where people stay in our hotel/motels and go to our restaurants and use our facilities.
“We’ve done that with our soccer complex. We worked with that back in 2003 and the city of Cookeville built a soccer complex and that brings in people for soccer tournaments and lacrosse tournaments. I think that increasing this tax and using it for tourism development is a good idea.”
Putnam County received $1,661,689 in FY 18 from the 7 percent lodging tax. Using these figures, Cookeville would have received $712,152 if a 3 percent lodging tax was in effect at that time.
“That’s a great deal of money,” Shelton said when presented with these figures. “Ours will be specifically earmarked for tourism. It’ll say it in the resolution. It specifically says, ‘quality of life, economic development.’ So, it won’t go in the general fund. It won’t go into utilities. It’ll go straight into that fund. So then how the council would use that, there’s lots of projects that we talk about, expanding the sports plex with additional fields, a potential aquatics facility of some type, anything like that would help bring in people. You know also there are options to give additional funding to the travel development council who makes sure that we get different type of activities and conventions and things like that.”
Shelton stressed that this tax would only benefit economic development and tourism, nothing else.
“It would be used for the specific purpose which I think is a very big key,” added Shelton. “Telling people where it’s (new tax revenue) going and why it’s going there is much better than just putting it in a black hole and they can’t really put their finger on where it’s going or what it’s going to be used for.”