Jackson increases occupancy tax rate
With a short but proven track record of funding capital projects, Jackson County will increase its occupancy tax rate to allow for more funding for its Tourism Development Authority.
“By doing this minor increase, which doesn’t affect our citizens’ pockets at all, it’s going to enhance not only our guest experience, but our citizen’s experience in various areas of recreation and tourism,” said Commissioner Mark Jones.
The occupancy tax rate, which is applied to anyone paying for a hotel room, Airbnb or VRBO, in Jackson County currently sits at 4%. This month, commissioners approved increasing that rate by 2% for a new 6% total occupancy tax rate.
The new rate will be effective July 1, 2025, and according to JCTDA Executive Director Nick Breedlove, should increase revenues by about $1.25 million annually, from $2.5 to $3.75 million.
The additional funds collected will be geared toward capital projects in the county.
“[With the additional funds] we’d be able to do a sizeable project every year to benefit the residents,” Breedlove said.
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Under state legislation, the JCTDA may expend one-third of its annual budget on brick-and-mortar capital projects, including convention and conference centers, arenas and stadiums, sports facilities, performing arts venues, museums and other attractions. This also includes greenways, trails and placemaking initiatives such as streetscapes and public art.
JCTDA expends these funds through a grant process — the Tourism Capital Project Fund — which makes money available to projects that are owned and operated publicly or by nonprofits. A one-to-one match is required, and the projects must cost at least $25,000.
Since the JCTDA began the grant process, it has awarded funding to the Town of Sylva in the amount of $367,757 for Bridge Park improvements, which were completed this spring, as well as $745,000 to Jackson County to extend the Tuckasegee River Greenway in Cullowhee.
“We’re asking for that 2% increase to put us in a competitive stance with our neighboring counties who are either at or going to 6%,” Breedlove told commissioners earlier this month. “What we would do is utilize the majority of the funds just as we are now for marketing, $2.5 million, and we would be able to take a lot of those additional funds that come in to do more impactful projects every year.”
While visitor spending exploded during and after the COVID-19 era, when JCTDA saw collections over the $2.5 million mark during both the FY 2021-22 and 2022-23, revenues were expected to level back out at the $2.5 million mark if the occupancy tax rate remained at 4%. The additional funding from the COVID years has gone toward the Bridge Park and Tuckasegee river Greenway projects.
“What we’ve done is we’re spending down that COVID surplus that we have in our budget,” said Breedlove. “So, once we exhaust that surplus, we won’t be able to do any capital projects without affecting our marketing to bring people here.”
The legislation that created the JCTDA gave county commissioners permission to increase the occupancy tax rate locally.
“A lot of places have to go back to Raleigh and introduce legislation,” said Breedlove. “You gentlemen have the power to increase that as you see fit.”
Commissioners approved the increased tax rate unanimously.
The board also approved a request to expand the career categories permitted to make up the JCTDA board. Because several hotels in the county have consolidated under the same ownership, there has been difficulty getting enough members to fill the board of directors. Previously, board members had to be hoteliers of hotels with 10 rooms or more split between the northern and southern portions of the county.
Now, board membership will be open to hospitality and tourism workers generally.
“This would create what’s called a hospitality and tourism category and our first preference would be on hoteliers, but if we can’t get a hotelier in that role, our second preference would be moving down for broader representation and those key people in the industry that understand hospitality and tourism,” Breedlove said.
