Hospitality Tennessee urges cap and accountability on hotel-occupancy taxes; committee rolls SB 629 one week

The Senate State and Local Government Committee heard testimony on Senate Bill 629, a proposal that would tighten definitions and oversight for local hotel‑occupancy tax spending and set a cumulative cap on local hotel taxes.

Sarah Beth Urban, president and CEO of Hospitality Tennessee, told the committee the bill “provides clear direction, accountability, and safeguards for the use of hotel tax revenues across the state of Tennessee.” Urban said the bill would require municipalities that have enacted hotel taxes or that include tourism language in private acts to submit an annual audit showing how hotel‑occupancy tax dollars were spent to the comptroller’s office.

Urban also described a provision aimed at rural communities that would allow short‑term rental tax receipts to be used for tourism development “without changing their previous private acts,” and proposed a cumulative local hotel‑occupancy tax cap of 8 percent in incorporated county areas to prevent “tax stacking,” which she said can dissuade visitors.

After the testimony, sponsor Chairman Briggs said more discussion and an amendment were expected and moved to roll the bill until next week. The motion to roll was seconded by Senator Gordon Hirie.

Why it matters: SB 629 would standardize how local hotel taxes can be used and add reporting to the comptroller, while placing a statewide cap intended to limit combined local hotel‑occupancy taxes.

Ending: The committee rolled the bill for one week to allow continued discussion and potential amendment.