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Clayton gets OK to raise occupancy tax rate
Hotel/motel rate to go to 8 percent

By Joel Hall

jhall@news-daily.com

Georgia Gov. Sonny Perdue signed into law this week House Bill 722, which allows Clayton County to raise its hotel/motel occupancy tax from 6 percent to 8 percent. While travelers visiting the county would have to pay a little extra, county agencies believe the additional revenue will bring additional tourism assets to the area.

According to the Georgia General Assembly's web site, the bill was signed into law by the governor on Monday. The bill allows the county to raise the tax - levied on every lodging-room stay in the county - to an 8 percent maximum, given that 1 percent of the increase is applied to a specific, tourism-generating project or attraction.

George Glaze, vice chairman of the Clayton County Tourism Authority, said he helped draft the resolution and submit it to the General Assembly. He said the other 1 percent of the tax increase would be used to fund new billboards, signs, and advertising, highlighting the county's current offerings.

"The return is quite significant to the county," Glaze said. "While it is an increase in tax, the intent is that it is going to draw in business for the local businesses and restaurants. The additional money enhances the advertising and promotion of the hospitality and tourist drawings that we already have."

Glaze said in the past, the tourism authority, which operates the Clayton County Convention and Visitors Bureau, has discussed using occupancy tax revenue to fund a "historical and educational" attraction for the county. However, he said the authority will engage in conversations with the county to find a project that is cost-effective and lucrative.

"Under this, 50 percent of the increase has to be used for a specific project," Glaze said. "We can't impose the tax until that has been done. Over the last 10 years I have been on the tourism board, we have looked at a number of projects. We have not settled on any one thing. It will be a board decision."

According to the Atlanta Convention and Visitors Bureau, visitors staying in Atlanta hotels pay a total of 15 percent tax on their room charge - 8 percent in sales tax and 7 percent in occupancy tax. When Clayton raises its occupancy tax to 8 percent, visitors staying in Clayton County hotels will pay an equal tax rate, as the sales tax rate in Clayton is 7 percent.

Clayton County's occupancy tax, at 6 percent, generated $1.083 million in gross revenue in 2008, according to Clayton County Convention and Visitors Bureau President and CEO Pat Duncan. He said that currently, two-thirds of the money raised by the tax goes toward the tourism authority, and one-third goes toward the Board of Commissioners to use at its discretion.

That contract will have to be re-negotiated once the county increases the occupancy tax, Duncan said. However, he said he believes the additional revenue will help the county add to its variety of attractions.

"More than anything else, a new product to be able to diversify our tourism assets is really important, so we are not just 'Gone With the Wind,'" Duncan said. "It will attract a diverse crowd with more diverse tourism interests. If there are a number of products, it gives them a reason to stay here longer ... it will be easier to promote too."

Charlie Overstreet, director of sales and marking for Holiday Inn on Old Dixie Highway in Jonesboro, said that given the state of the economy, additional occupancy tax may prove to be a "double-edged sword."

"I'm a little concerned about the tax increase given the state of economy right now," Overstreet said. "We're getting revenue to promote tourism in the county and on the flip side, there are those who will balk at paying another 2 percent. To some people, 2 percent is going to be a substantial amount of money.

"I understand why they are doing it," he said. "I'm not sure the timing is right."

Grant Wainscott, director of the Clayton County Department of Economic Development, said he believes the increased occupancy tax will benefit tourism, rather than drive it away. He said he believes the money will help the county create more cultural amenities and attractions.

"An increase in hotel/motel tax is absolutely not a deterrent," Wainscott said. "The 2 percent additional tax that will be generated is negligible in an average hotel bill, but collectively, is really significant to be able to leverage for new product development. If anything, it adds to their experience in Clayton County by allowing us to have more."