Lodge tax will increase in Grand Rapids might be greater than Nashville, Chicago
GRAND RAPIDS, MI – As town, county and personal financial growth group search for methods to fund a Grand Rapids soccer stadium, amphitheater and different tourism-related capital tasks, they’re eyeing a lodge tax improve in Kent County.
No plans have been finalized. However new laws authorised by the state Home and Senate — and awaiting Gov. Gretchen Whitmer’s signature — will give voters the choice of accelerating the county’s lodge tax from 5% to eight%. It is going to additionally enable voters to determine whether or not so as to add a further 2% lodge tax in Grand Rapids.
When different state and native taxes and assessments are included, these will increase, if authorised, would carry the full lodge room tax in Kent County to 18% and 20% within the Metropolis of Grand Rapids.
Associated: Lodge tax in Grand Rapids could be among the many highest in the US, and here is why.
For Grand Rapids, this could be the seventh-highest complete lodge tax in the US, in accordance with a 2019 examine by the American Lodge and Lodging Affiliation. A spokesperson for the affiliation mentioned there was no newer examine obtainable.
What are the full taxes on lodge rooms in different cities?
Here is a take a look at the ten cities with the very best lodge taxes in the US
- Columbus, Georgia: 22.7%
- Decatur, Georgia: 22.47%
- Macon, Georgia: 21.8%
- Birmingham, Alabama: 20.66%
- Marietta, Georgia: 20.48%
- Kansas Metropolis, Missouri: 20.4%
- Augusta, Georgia: 19.8%
- Memphis, Tennessee: 19.74%
- St. Louis, Missouri: 18.93%
- Savannah, Georgia: 18.29%
The above numbers are from the 2019 AHLA examine and embody all state and native gross sales taxes and assessments. Six of the highest 10 cities are from Georgia, the place the state imposes a flat tax of $5 per evening, along with different state and native taxes and assessments, the examine says. To view the total examine and its methodology, click on right here.
The common complete lodge room tax in 244 cities throughout the US is 13.5%, the examine says.
Here is a take a look at a number of different locations within the Midwest, Michigan, and elsewhere in the US
- Chicago, Illinois: 17.39%
- Columbus, Ohio: 17.5%
- New York, NY: 15.49%
- Miami, Florida: 13%
- Cleveland, Ohio: 17.5%
- Nashville, Tennessee: 17.13%
- Detroit: 14%
- Romulus: 14%
- Ann Arbor: 11%
What’s the present lodge tax in Kent County and Grand Rapids?
The full tax paid by visitors in a lodge room in Kent is 15%.
This consists of a 6% gross sales tax, a 5% county lodge tax, and a 4% advertising and marketing evaluation submitted to Expertise Grand Rapids, the county’s tourism advertising and marketing group.
Laws into account by Whitmer would enable voters to extend the county’s lodge tax by 5% to as much as 8% and impose a further 2% tax in Grand Rapids. This may elevate the full tax on a lodge room in Kent County to 18% and 20% in Grand Rapids.
However earlier than that may occur, the Kent County Board of Commissioners and the Grand Rapids Metropolis Fee should comply with put the will increase on the poll, officers say, and voters must approve them.
Will the will increase be on the poll?
At this level, the Kent County Board of Commissioners and the Grand Rapids Metropolis Fee haven’t formally mentioned the concept, officers say.
Nevertheless, officers are eyeing the potential for a lodge tax improve to assist fund venues.
The Kent County Board of Commissioners is contemplating an settlement to information the event of the soccer stadium on Nov. 30. He says growth of the soccer stadium relies on voters approving a county lodge tax improve and a further metropolis lodge tax.
The precise quantity by which the tax needs to be elevated was not said within the memo.
Kent County Fee Al Vanderburgh mentioned discussions about tips on how to finance the soccer stadium are persevering with with town of Grand Rapids, Kent County and the non-public financial growth group Grand Motion 2.0. The financing combine has not been finalized.
“The lodge and motel tax generally is a instrument within the toolbox,” Vanderburgh mentioned.
Neither the estimated price nor the placement of the soccer discipline has been publicly introduced by Grand Motion 2.0. However floor parking heaps close to the David D. Looking YMCA in downtown Grand Rapids are reportedly being examined as a possible location.
Grand Motion and different backers of the mission have additionally not spoken publicly about public demand for a soccer stadium, what league or workforce will play there, and what number of occasions the stadium is anticipated to host on an annual foundation.
How a lot income does the county’s lodge tax at present herald, and what’s it used for?
The full lodge room tax in Kent is 15%. 5 p.c of it goes to the county via the lodge tax. The remainder goes to the state via a 6% gross sales tax and the Grand Rapids Expertise via a 4% advertising and marketing evaluation.
Kent County is utilizing its 5% lodge tax income to make annual funds on $84.6 million in bonds it borrowed in 2001 to assist finance building of the DeVos Place Conference Heart. It additionally makes use of the funds to offer assist for Expertise Grand Rapids and cultural festivals resembling ArtPrize and the Competition of the Arts.
The 5% lodge tax is anticipated to generate $14.5 million this yr, mentioned Jeff Dodd, Kent County’s director of economic providers.
The majority of that’s used to make annual bond funds on DeVos Place bonds. This yr’s cost is anticipated to price $8.5 million, Dodd mentioned throughout a latest Kent County Board of Commissioners assembly. DeVos Place’s bonds are anticipated to be paid off in 2031.
How a lot will the lodge tax improve generate?
If residents approve a rise in Kent County’s lodge tax (from 5% to eight%, for a complete tax of 18%), the tax is anticipated to generate a complete of $24.3 million, in accordance with Kent County.
That determine assumes the tax was enacted in 2024 and picked up for a full yr in 2025, mentioned Lori Latham, Kent County Assistant Administrator.
The county additionally estimated how a lot town of Grand Rapids would gather if voters authorised a separate 2% lodge tax.
In its first yr, this tax is anticipated to succeed in $2.7 million, Latham mentioned.
What do lodge operators say concerning the potential improve in taxes?
Doug Small, president and CEO of Expertise Grand Rapids, the county’s vacation spot advertising and marketing group, mentioned he helps giving voters the choice to extend the lodge tax as a result of the amphitheater and soccer stadium “will take us to a different degree as a customer vacation spot.”
Small beforehand informed MLive that he spoke with Expertise Grand Rapids’ Lodge Advisory Committee, which consists of 13 lodge operators from throughout Kent County, concerning the laws.
“I am not going to misinform you — I do not assume everybody within the room wished their taxes to go up,” he mentioned. “However while you clarify the reasoning behind it, I believe they perceive that it’s for the advantage of the vacation spot.”
Rick Wynn, president of AHC Hospitality, previously often called Amway Lodge Company, can also be a supporter of the tax improve. AHC operates 5 lodges in downtown Grand Rapids, together with Amway Grand Plaza and JW Marriott.
Along with his duties as AHC president, Wayne chairs the Grand Rapids Downtown Improvement Authority and the Grand Rapids-Kent County Conference/Enviornment Authority, and has testified in assist of state laws that might give voters the choice of a tax improve.
Nevertheless, one lodge operator mentioned she had blended emotions concerning the thought of elevating the lodge tax.
Lisa Calhoun, board president of the Kent County Hospitality Affiliation, mentioned she helps tasks that carry extra guests to the world. However she mentioned she was involved concerning the potential for the tax to harm companies.
“We simply wish to be sure that any tax improve does not make our metropolis and our lodges much less aggressive in Michigan or regionally,” mentioned Calhoun, who additionally serves as basic supervisor of the DoubleTree by Hilton close to Gerald R. Ford. Worldwide Airport in Cascade. “We do not wish to incur these large taxes on guests who come to town.”
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