Board takes final steps to enact occupancy tax
By Scott Nicholson

The Watauga County Board of Commissioners took one of the final steps in enacting a county occupancy tax by adopting a formal resolution Monday.

The tax takes effect July 1, 2006 which will give the tax administrator’s office time to finish with property revaluations, train staff and produce and send out collection forms.

A bill adopted by the General Assembly this summer gave the county the authority to establish “Watauga County District U,” which encompasses all unincorporated areas of the county.

The tax applies to the gross receipts “derived from the rental of any room, lodging, or accommodations furnished by hotel, motel, inn, tourist camp, or similar place within the district that is subject to sales tax as imposed by [state statute].”

The resolution also formally establishes a Watauga County District U Tourism Development Authority (TDA). The TDA will consist of six members, as yet unnamed.

By statute, a third of the TDA members must be affiliated with lodging businesses that collect the taxes and half must be people currently working in travel and tourism promotion.

Original appointment terms will be staggered, as one-year, two-year, and three-year terms so that the TDA will never lose all its sitting members at one time.

After that, terms last three years. The commissioners will collect names of potential TDA members and appoint them at least 60 days before the tax takes effect.

Commissioner Keith Honeycutt said it might be helpful to have a county TDA member who also serves on the town of Boone’s TDA board as a county representative, though county-collected occupancy taxes can’t be spent in the incorporated areas. Boone, Blowing Rock and Beech Mountain each have their own occupancy taxes and TDAs.

Earlier this year, county manager Rocky Nelson gave a report on potential revenue generated by the tax. He said there were about 750 lodging units that would be eligible to collect the tax.

He said if they rented for an average of $90 per night and had an occupancy rate of 20 percent, about $4.8 million in occupancy revenues would be generated.

Assuming a 70-percent collection rate, the tax would generate about $205,000 per year.

Nelson said the county would have administrative costs in collecting the tax, such as postage and forms, and tax administrator Kelvin Byrd said his staff would probably need at least one new position and possibly another part-time employee. Nelson estimated the collection costs with the extra staff members to be between $60,000 and $90,000 per year.

Under statutory guidelines, two-thirds of the collected revenues must be used directly for tourism and travel promotion.

One-third of the money can be used for capital projects designed to enhance tourism, such as recreational and leisure facilities, trails, and parks.

• Scott Nicholson may be

contacted at nicholson

@wataugademocrat.com.