By Nathan Straus
Lon Morris College and its students got a fantastic deal when area motels America’s Best Value Inn and Trade Winds Motel let the school use their buildings for student housing. However, the city of Jacksonville will lose out on around $500 each day in hotel occupancy tax money while students, rather than tourists and travelers, occupy the motels.
According to the Texas State Comptroller’s Web site, Lon Morris is exempt from the state portion of the occupancy tax, which is six percent of the room fee. The college is not exempt from the local option for the tax in most cases.
Lara Feagins, Jacksonville’s interim finance director, said the city’s portion of the hotel occupancy tax is seven percent, though the new allocation for the next fiscal year is yet to be determined.
“After a guest becomes a permanent resident or provides notification, the guest isn’t eligible for the local portion,” Feagins said. A guest becomes a permanent resident after 30 days or if the resident provides notice of intent to stay for 30 days or longer.
Money from the local option goes toward putting more heads in more Jacksonville beds, she added.
RJ DeSilva, spokesperson for the comptroller’s office, said city’s aren’t required to put a local option into effect, but also stated if the city does, seven percent is the upper end of the local rate which can be levied.
“We don’t collect local hotel taxes,” DeSilva said. “The state portion is used for general purposes.”
Hotel occupancy tax funds are a sizable chunk of state revenue. Last year the state posted $371 million from the state’s portion of the tax. This year to date up to $313 million has been cited as revenue.
DeSilva also stated there’s no plan to raise the six percent state portion, which has been in effect several years, any time soon.
David Gehrels, Lon Morris’ director of campus life, said each of the nearly 245 male students rooming in the motels pays about $3,200 each year for the room; $1,600 per semester.
“It’s approximately $30 a day,” Gehrels said. America’s Best Value Inn is slightly more expensive for the students than Trade Winds.
Normal dormitory facilities on the Lon Morris Campus will run a student $2,800 a year.
In the second quarter of 2009, America’s Best Value Inn posted taxable receipts of $246,941.35 at a capacity of 50, and total receipts of $283,032.49. At a seven percent tax rate, the city garnered $17,285.89 from the inn’s taxable receipts. A hotel’s taxable receipts are listed along with occupancy.
Trade Wind’s taxable receipts hit $60,639.99 and come to a total of $4,244.80 for Jacksonville. This is a total of $21,530.69 for both combined. While the total is about the same with the rooms occupied by students when the length of a semester is compared to the length of a quarter, both the city and the state gain nothing from the direct room sales.
Mo Raissi, city manager, said this is just fine. After all, the presence of the students means more heads in city beds.
“Even though there’s no money from the hotels, they help every store in the community,” he said of the students. “It’s more trips to burger joints, more trips to WalMart, they fill up their vehicles and help the community.”
Tax receipts were taken from public records on the Texas State Comptroller’s Web site at www.window.state.tx.us/taxinfo/hotel/.
By Nathan Straus
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