Starkville hotel tax snafu clarified

May 14, 2009

Tim Pratt -

 

STARKVILLE -- A clerical error is to blame for the sudden drop-off in hotel tax revenues in the city of Starkville, tourism officials said this week. 

 


The city''s Visitors and Convention Council became alarmed last month when hotel tax revenues were down more than $25,000 compared to the same time last year. 

 


But Jon Maynard, president and CEO of the Greater Starkville Development Partnership, said he has talked with the State Tax Commission and the problem has been discovered. 

 


Two hotels in Starkville changed ownership in recent months, and the hotels'' tax revenues inadvertently were classified as food and beverage taxes, Maynard said. Subsequently, hotel tax revenues in the city seemingly dropped while food and beverage tax revenues increased. 

 


According to Maynard, the amount in question is about $40,000, though he''s not sure if $40,000 is the amount of hotel taxes mistakenly designated as food and beverage taxes, or if $40,000 represents the swing in funds $20,000 would make when switched from one category to the other. 

 


The State Tax Commission sends the city''s 2 percent hotel tax back to City Hall, where Starkville officials distribute the funds to the VCC. The 2 percent food and beverage tax is distributed among several entities, including Mississippi State University and the Oktibbeha County Economic Development Authority. 

 


Maynard and others in the tourism industry are pleased to see hotel tax revenues are not down $25,000, as previously thought, although the shift in funds would mean some organizations which receive food and beverage tax revenues, but no hotel tax revenues, could suffer, he said. 

 


"Some of those organizations who receive just the food and beverage tax might take a hit," Maynard said. "It''s not like they''re going to go in and take the money away from them; they''ll just hold off on giving out that amount to those organizations."