Lodging tax rates per community
Butler County enacts a 3 percent lodging taxes, but communities can also enact additional lodging taxes. Here’s who charges what:
Fairfield: 3 percent
Hamilton: 6 percent
Middletown: 3 percent
Oxford: 6 percent
Monroe: 3 percent
Liberty: 3 percent
West Chester Twp.: 3 percent
Source: Ohio Department of Taxation
Cities and townships in Butler and Warren counties have collected more than $14 million in lodging, or hotel, taxes over the past five years — funds they’ve used to improve roads, sustain police and fire services and market events and attractions that bring thousands of out-of-towners to the area.
As the recession and state cuts have decimated many communities’ general fund budgets, government officials say lodging taxes, or fees paid by guests for occupying a hotel room, have been one of their most dependable sources of cash.
“The city is spending more than it receives every year, despite cuts that have been bone-deep in most general fund departments,” said Mark Zimov, Hamilton’s senior budget analyst. “In order to sustain critical public services at the desired level, a diverse and healthy tax base is essential. The hotel tax has been a fairly stable revenue stream that could grow when business activity increases.”
Municipalities and townships are allowed by law to collect up to 6 percent in lodging tax, so long as the county where they are located has not imposed the tax. Butler County collects a 3 percent lodging tax in all communities expect for Hamilton, Middletown and Oxford. Hamilton and Oxford levy a 6 percent lodging tax, while Middletown, Fairfield, Monroe and West Chester Twp. charge 3 percent.
The demand for hotel rooms in the Dayton and Cincinnati area is growing as the number of business travelers has increased, according to the Ohio Hotel and Lodging Association. And hotels in the area will likely get a boost from the new racino (which does not have a hotel attached) set to open just off Interstate 75 in Warren County’s Turtlecreek Twp. in spring 2014.
That’s good news for convention and visitor’s bureaus in both counties because cities and township typically give them a percentage of all hotel taxes brought in. Convention and visitors bureaus in Butler County have received about $3 million from lodging taxes since 2008.
The city of Hamilton gives half of the lodging taxes it collects to the Hamilton Visitors Bureau and uses the other half to support operations such as police, fire, health, parks and recreation, public works and more. Steve Timmer, treasurer of the Hamilton Visitors Bureau, said they turn their share of the tax revenues over to the Butler County Convention and Visitors Bureau to oversee promotions, website issues and pay bills at the city’s Welcome Center.
Oxford uses slightly more than half of each year’s hotel tax collections to support the city’s general fund functions, be it for police, fire/EMS, streets, recreation, public health and welfare, community environment or general governmental activities, according to Joe Newlin, finance director for the city of Oxford. The remainder goes to the Oxford Visitors Bureau.
Newlin said the hotel tax is “very valuable” to the city of Oxford, where occupancy is largely driven by Miami University events, as well as chamber of commerce and cultural events.
“It does help quite a bit to offset some of the costs that are associated with having a college in town … especially the extra police presence that we need in the city,” Newlin said. “It helps offset the cost of patrolling, keeping up the streets and doing what we do in front of the hotels, also. It’s a very equitable way to help finance the city’s general fund.”
In 2012, hotel tax amounted to about 1.7 percent of the city’s operating income in the general fund revenue, he said.
“It’s especially comforting now that the state has taken back so much of the shared revenue that they haven’t decided to do anything with the hotel tax,” Newlin said.
Mark Hecquet, executive director of the Butler County CVB, said the majority of the tax money they take in is spent on “promoting the county and its attractions and destinations to draw businesses into the county to spend money at restaurants and hotels and everything else.”
County residents have seen some of that investment in the form of new way-finding signs posted this year that direct travelers to various attractions and destinations throughout the county. But what many won’t see are the print, online, television, radio and billboard advertisements the bureau finances to target and capture people 50 to 70 miles away in areas such as Louisville, Columbus and Indianapolis.
And the marketing is working, Hecquet said.
Last year, unique visitors to the bureau’s website, GettotheBC.com, were up 147 percent, and visitor guide requests through print advertising jumped 24 percent. The bureau’s social media presence has grown, too, with a 152 percent increase in its number of Facebook followers and 123 percent more views of Butler County videos on YouTube.
And the economic impact the lodging tax has on a community and county is exponential.
The Butler County Visitors Bureau’s last research study shows for every $1 invested in marketing, just under $6 is returned to the county through visitors spending.
“Obviously our growth depends on the success of the hotels because that’s our number one funding stream,” Hecquet said. “The more people that are coming to visit, the more people that are staying tonight equates to more funding that we’re able to put back into marketing the county.”
And that money is only expected to increase with the opening of a new Hampton Inn late last month in the East End of Middletown and a Holiday Inn and Hilton Gardens slated to open in West Chester Twp. sometime next year. The Hampton Inn is expected to increase tax collections by $10,000 a year in Middletown.
The city of Middletown pays the Middletown Convention and Visitors Bureau $120,000 annually. Half of that money is paid to the Butler County Visitors Bureau while the other half is used to help promote the city, said Linda Moorman, president of the Middletown CVB.
“The value the money the Middletown Convention and Visitors Bureau receives is with the advertising we fund for events,” she said. “It helps to bring a greater economic impact to local business with the visitor stopping to spending money in our hotels, gas stations, restaurants and shopping at local stores for some examples.”
The Middletown CVB issues grants to help fund local events. This year, $30,000 has been committed to help advertise events in the city which have the greatest impact on the community. But the bureau’s board is re-evaluating the grant program and will “work on a broader, more effective way to advertise all of our city’s events,” Moorman said.
“We care about the quality of life for the local residents as well as the visitor,” she said.
The new Steiner + Associates mixed-use development in Liberty Twp., which is slated to break ground sometime this year and take two to three years to develop, has the potential of adding new attractions and a new hotel.
Liberty Twp. enacted a hotel tax in June 2008 to prepare for future development in the township, primarily around the Liberty Way interchange where a mixed-use development, including hotels, was envisioned, according to Caroline McKinney, the township’s economic development director.
“We wanted it in place prior to development commencing,” McKinney said. “Liberty Twp.’s hotel tax structure mirrors our neighboring communities, thus creating no disadvantage or advantage to a hotelier or a visitor.”
In early 2014, the new racino in Turtlecreek Twp. is expected to have a significant impact on communities with hotels along Interstate 75, especially in Monroe and Middletown.
“From an economic development perspective we have seen an increased interest on our commercial parcels surrounding the highway, which I believe is a result of potential businesses wanting to capitalize on Monroe’s regional destinations, our ideal location along I-75, as well as a result of the improving economy,” said Kevin Chesar, Monroe’s director of development. “We are hopeful that our regional destinations and the accompanying future development will serve as attraction amenities to increase overnight stays in Monroe.”
In Warren County, where tourism is the top industry with an annual economic impact of $993 million, revenues from the lodging tax make up 97 percent of the budget for the Warren County Convention & Visitors Bureau, according to Phillip Smith, the bureau’s president.
Having a tax that supports the bureau’s mission is important because tourism supports one in every seven jobs in Warren County or 14.3 percent of the total, he said.
“Visitor spending makes it possible for local business owners to hire people, keep people on their payroll or expand their businesses,” Smith said. “Additionally, visitor-generated sales tax helps the county provide safety services, road improvements and other benefits for our residents.
“So having tourism as our number one industry in Warren County is so important, and helps in ways many people may not consider,” he said.
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