Vidalia asks legislature for authority to levy new hotel tax

Published 12:08 am Sunday, April 6, 2014

NATCHEZ — Visitors to Vidalia may soon find themselves paying a fee that will later be used, in part, to lure them back.

A bill awaiting consideration in the Louisiana Legislature, House Bill 425, would allow the City of Vidalia to create a tourism authority with the ability to levy hotel occupancy taxes of up to 6 percent on hotels, motels and overnight camping facilities in the authority’s district.

Vidalia Mayor Hyram Copeland said the aim of the measure is threefold. The first is to generate money to advertise the area’s tourism opportunities.

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“We have not had the money for a proper tourism plan, and this is something we are going to have to do if we are going to get it,” he said.

The second reason, Copeland said, is to generate funding for the Vidalia Conference and Convention Center. A tax on riverfront hotels, put in place in 2007, has not generated enough money to fully fund the convention center’s operations, a goal Copeland said he wants to see achieved before he leaves office.

The legislation, sponsored by Rep. Andy Anders, D-Clayton, defines the boundaries of the authority — named the Vidalia Tourism Development District — as the same as the city’s municipal limits, with the exception of the riverfront.

The Vidalia Riverfront is already considered a development district and has a board that levees a 6-percent tax on hotels on the riverfront — Comfort Suites and the Riverview Campground are included — that is designated for the operation of the Vidalia Conference and Convention Center.

Copeland said the spirit of the new bill is based on the future of hotel development in Vidalia. Several hotel companies have expressed interest in building in Vidalia.

Copeland said the city is talking to three hotel groups, and the further development of the Tuscaloosa Marine Shale oil and gas play will demand more hotel rooms in the area.

“We are asking that, due to the possibility that we will have more hotels come into Vidalia, we want to incorporate them into the hotel-motel bill (on the riverfront),” Copeland said.

“Right now we are only charging the riverfront hotels, and it is not fair to them that we do not include the rest of the town.”

The third aim of the bill is to generate additional funds for the Concordia Parish Economic and Industrial Development District.

Currently, 3.97 percent of state sales and use taxes collected on hotel rooms in Concordia Parish is directed to the CPEIDD. However, that funding does not generate enough money to support the district’s operations, Copeland said.

Copeland is the vice president of the CPEIDD board.

“In recent months, we have been having to go to the private sector to ask for money for CPEIDD, and we can’t keep doing that,” Copeland said.

CPEIDD Director Heather Malone said she worked with Vidalia to draft the legislation and recommended the city include the economic development portion of the bill.

One of the economic development body’s stated goals is to encourage tourism, and the organization has already done some cooperative advertising with the city, Malone said.

However, tourism isn’t at the forefront of Concordia Economic Development’s mission.

“Tourism is an industry in and of itself, just like manufacturing and warehousing are industries,” she said. “It definitely brings new dollars into the community. Typically, because communities have tourism organizations separate from economic development organizations, the economic development organizations tend to focus more on the heavy industry base rather than the tourism sector.”

Copeland said the tax would require voter approval, and the city will be taking the message that it will not be a burden on area residents to the streets before it goes on the November ballot..

“This doesn’t increase anybody’s taxes because it is an occupancy tax,” he said. “It is paid by the people who are visiting, not the hotel owners.”

Only one motel currently falls within the district’s boundaries, Budget Inn on Carter Street.

Owner Vipin Patel said most of Budget Inn’s business is business travelers, family members of locals who are visiting the area and locals who might need a room for a night.

“Mostly my business is working people, not tourists,” he said.

Patel said he was not aware of the legislation prior to Friday, and would be contacting his legislators to oppose the measure.

“They should be sending some kind of notice to us as a business that this would affect to get some kind of opinion,” he said. “Adding 6 percent would bring the tax to 14.75 percent. That’s like a New York tax.”

The riverfront hotel tax faced a constitutional challenge from Comfort Suites owner Virgil Jackson, who argued the riverfront was a political subdivision of the city rather than that of the state and the tax was not put in place by Vidalia voters. The Louisiana Supreme Court affirmed the rulings of the local district and appeals court that the tax could be levied in 2008.

The new legislation, however, defines the Vidalia Tourism Development District as an independent body that will work directly with the City of Vidalia. The Vidalia board of aldermen will appoint the district’s commissioners, who will serve on four-year staggered terms.

The legislation requires that any funds the district collects be deposited in a special account in the town treasury, subject to audit on an annual basis.

The proposed law also requires any money the city directs to the district must be spent, and the Vidalia board of aldermen will approve the district’s budget.

Subject to the city’s approval, the district will be able to hire employees, contract with experts as needed and reimburse its governing members for expenses incurred carrying out its official duties.

The bill is currently assigned to the House committee on municipal, parochial and cultural affairs.

The legislative session started March 10 and will adjurn June 2. If passed, the bill will be effective July 1.