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Revenue update shows modest gains; councilors confront hotel-motel tax allocation 'mess'
Summary
Staff reported higher year-to-date sales and property tax collections but lagging hotel-motel receipts; councilors said state records and a 40-year-old private act leave allocation unclear and recommended joint steps with the county and possibly an attorney general opinion.
Jackson City — Staff told the council that non-property tax revenues are running ahead of last year while hotel-motel tax receipts are lagging, and members pressed for clarity about who controls which portion of the hotel-motel tax.
The revenue update showed December local-option sales tax about $76,000 higher than expected and non-property tax revenue about $243,000 higher year-to-date compared with the same period last year. State sales tax receipts were roughly $179,000 higher year-to-date (about 3%). Hotel-motel taxes were described as lagging by about $62,000. Property-tax collections are ahead of last year by roughly $1 million, with about $1.6 million in initial billings still outstanding; staff said a portion of delinquencies may be turned over for collection in about eight to 10 months.
Councilors shifted the discussion to hotel-motel tax structure and ownership. Speakers said the city and Madison County are each listed at 5% on the Department of Revenue website stemming from an interlocal agreement and an older private act; that representation has left uncertainty about which government “owns” which share and whether any additional percentage would need to be tied to tourism uses. Several councilors described attempts to get a clear answer from the Department of Revenue and said they were told the matter is complicated and unclear.
Members discussed next steps: a joint city–county approach with Visit Jackson and outreach to the attorney general’s office or state legislators to clarify ownership and how any increase could be applied. Councilors noted that if an opinion finds the county owns the city’s 5%, the city could implement a local increase (for example, a county increase of four percentage points was discussed hypothetically). Staff and council members said any change would likely require interlocal adjustments, private-act amendments or state legislation, and that the process would take time.
Councilors said tax receipts collected from visitors are an important revenue source for city services and infrastructure used by nonresidents; they signaled interest in exploring opportunities to capture additional tourism-related revenue while acknowledging legal and procedural hurdles.
