Chamber proposes a bed tax

COLUMBIANA The city and its tourism bureau could gain more revenue by instituting a bed tax, according to members of the Columbiana Area Chamber of Commerce.

David Barbee, co-chair of the Chamber’s Business Development Committee, told City Council on Tuesday the city should establish a bed tax before it’s too late.

“The idea is that we are trying to think ahead,” he said. “There are two things that are certain in life: death and taxes. Some taxing authority, if they see an opportunity … will sweep in and put a bed tax in. We’d like to see that if that were to happen taxes would stay locally,” he said.

He said the chamber and its tourism bureau have discussed the idea and believe it would benefit not only the bureau, but the city.

The bureau is a 501(c)3 non-profit originally established by the chamber in 2010.

A letter signed by Barbee and co-chair Virginia Perkins was mailed to Mayor Bryan Blakeman before the meeting explaining the chamber’s stance, and Blakeman read that letter during the meeting.

“With future development of the City of Columbiana forecasted, the time is ripe to establish direct benefits between that development and our community. A ‘bed tax’ offers one way to create that direct benefit,” the letter stated.

The letter explained the tax would assess a percentage fee for overnight hotel guests, and the city would share those tax revenues with the tourism bureau. The tax “creates a link” between the development and reinvestment in the community, it said.

Revenue to the city would go into the general fund.

“It’s the idea of being proactive, rather than letting something happen and then being caught off guard by some other taxing authority beating us to it. We are still in the discussion stage,” Barbee said.

He added the tax would allow the tourism bureau to expand promotions in the area.

The bureau is currently responsible for annual events such as Springtime in Columbiana, the Columbiana Wine Festival, Harvey S. Firestone Festival of the Arts and the Joy of Christmas drive-through light show.

The events are funded by the chamber and community sponsors and, according to the letter, have exceeded expectations to the point that the current funding sources are reaching a maximum capacity to handle them.

The chamber is not proposing any additional taxes on existing businesses already being taxed, Barbee said.

“It is my understanding that a bed tax would not stack on top of another one. The first political subdivision taxing authority takes precedence in all other bed taxes around,” he said, referring specifically to the Dutch Village Inn, which pays a bed tax to Mahoning County.

Mahoning County has a three percent bed tax while Columbiana County does not have a tax, although some county communities have instituted their own, such as the Village of Lisbon, which has a three percent tax.

Barbee said the chamber looked into other areas that have enacted the tax and believes the city should follow Lisbon’s template. A copy of the resolution adopted by village officials was provided to council.

The Lisbon tax was adopted in the early 2000s, after the section of state Route 154 where the Lisbon Inn was located was annexed into town.

The resolution imposing the tax required Lisbon’s share to be split 50/50 with the local chamber. While the village can spend the money however it sees fit, the chamber is required to use the money on tourism, which is the same thing the Columbiana Chamber is proposing.

The resolution also stipulated the tax only applies to establishments offering up to five rooms or more to guests, and Barbee said it would not affect “mom and pop” businesses in Columbiana.

Chamber Executive Director April Brinker said Thursday there are currently no establishments in the city that would be eligible for the tax, although a planned development along state Route 14 near Prima Health Care would be in the future.

Tom Mackall of Firestone Homestead LLC is heading up that project and has said plans include a hotel on the other side of state Route 14 where the Columbiana Maze Craze is currently located.

Barbee and Perkins did not specifically refer to the development during the meeting, although Finance Director Mike Harold said afterward that is likely what the suggestion is targeting.

Blakeman and Councilmen Dick Simpson and Dick McBane said the tax is a good idea.

“It’s one of the few taxes where the city and all residents benefit, and the residents don’t have to pay for it. I don’t think there is a business that it could hurt. It’s not like someone is going to not come here because of that. It’s one of the few taxes I personally support,” Blakeman said.

McBane said the tax is fairly common all over the country and that in his extensive travels he has seen tax rates as high as 15 to 20 percent in some locations.

The chamber is suggesting three percent, although Barbee said that rate is not set in stone.

“I think, given the circumstances that someone else can come in and impose it on the city, I really think we ought to look at it very seriously and consider the possibility of it because I think the benefit to the tourism bureau is an extremely positive impact,” McBane said.

Municipal Attorney Daniel Blasdell said he and City Manager Lance Willard are looking into it, and that some other areas in the county that have a bed tax are East Liverpool, Salem and St. Clair Township, which have six percent, and Elkrun Township has three percent.

Salem is not collecting on its bed tax currently, he noted.

He said the important factor is determining whether any tax instituted by the city would “piggy-back” onto existing taxes, such as Mahoning County.

Another factor is making sure the revenue can be split between the city and Chamber.

“If the split is not there it doesn’t do the organization any good because that all goes into the general fund of the city,” he said.

No action was taken during the meeting.