The Lancaster County Economic Development Authority voted on Jan. 15 to ask the Lancaster County Board of Supervisors to consider passing through a portion or all of the county’s transient occupancy (lodging) tax to the EDA to fund economic development programs and tourism activities.

EDA staff presented a memorandum recommending the request and highlighted the county’s current lodging tax rate of 2 percent and recent annual yields (FY23 ~$67,068; FY24 ~$74,155). Staff noted that under the Code of Virginia, amounts above 2 percent and up to 5 percent are restricted to tourism and travel promotion, while funds at or below 2 percent can be used as the locality chooses.

Board members discussed examples from neighboring localities—Kilmarnock and Middlesex County were cited for higher lodging tax rates and for passing funds to destination-marketing organizations—and considered how a pass-through could support a revolving loan fund or expanded grant programs. EDA members said existing annual administrative revenue is limited (approximately $12,472) and that a stable revenue stream would let the EDA deploy more meaningful assistance to small businesses and start a loan program to fill financing gaps.

The board approved a motion to recommend that the Board of Supervisors consider passing through a portion or all of the transient occupancy tax and directed a small EDA subcommittee to define proposed uses of the proceeds ahead of the county’s March work sessions.

Next steps: The EDA subcommittee (limited to up to three members under open-meeting rules) will convene to craft a recommendation and proposed uses; the EDA will present the request to the Board of Supervisors during its March budget work sessions.