A new tax on hotel and motel stays in Johnson County collected nearly $30,000 in one month, and now a local board will be looking at how to spend the money.
Beginning Jan. 1, a new 5 percent innkeeper’s tax was enacted on stays in hotels, motels and bed and breakfasts in Johnson County. That money can be used toward promoting Johnson County events, businesses or attractions.
A convention, visitor and tourism board was created by the Johnson County commissioners and Greenwood Mayor Mark Myers late last year to decide how the money collected in the new tax will be spent. So far, no decisions have been made, but the board is expected to have a budget created by July for how they will spend the money beginning in 2017.
The board will be studying each month’s collections to help determine how much it can spend on staffing for a tourism bureau, promotional items, such as billboards and brochures, and cover the cost of a website to bring attention to local businesses or events.
Initially, experts estimated that about $700,000 could be collected annually through the innkeeper’s tax, convention, visitor and tourism board president Mike Neal said. But the first few months of each year are typically the slowest for the lodging industry, Neal said.
Once more visitors come to the area for events, such as the Google conference at Franklin Community High School in April or the Indianapolis 500 in May, Neal expects more money to be collected, he said.
“It looks good to me, but of course we have nothing to compare it to,” Neal said. “I think it’s a good number.”
Also, out of the 22 hotels, motels or bed and breakfasts in the county, about nine did not report back to the treasurer’s office, Neal said. On the 20th of each month, the Johnson County Treasurer’s Office requires every hotel or motel to report their innkeeper’s tax revenue for the previous month. In January, $29,739 was collected from more than a dozen businesses, Treasurer Diane Edwards said.
The treasurer’s office will be following up with the other businesses to see if they forgot to turn in their paperwork, or if they didn’t have anyone stay overnight last month, Neal said. If any of the nine businesses did forget to turn in their paperwork to the county, the January total could climb higher, Neal said.
With at least one month of data, the convention, visitor and tourism board will begin working to determine what expenses they will have in 2017. For example, Aspire Johnson County created a website for the tourism board to eventually take over, once they have enough funds. The website, which will promote businesses and events in Johnson County, is expected to launch in March and April before the tourism board takes over the site, Neal said. Aspire has offered to pay for the maintenance and hosting of the site through January 2017, and then it would be up to the board to cover the rest of those costs, Neal said.
Tourism board members are still researching what they would want to spend money on in future years, so next year’s budget is planned to be conservative, since they are unsure how much will actually be collected this year, Neal said.
A new tax that is added onto hotel, motel and bed and breakfast bills has been in effect in Johnson County since Jan. 1. Here’s a look at what we know so far:
5: The percentage of the bill that is added on through the innkeeper’s tax
22: The number of hotels, motels and bed and breakfasts in Johnson County
$29,739: The amount collected through the innkeeper’s tax through the month of January
$700,000: The estimated amount that the innkeeper’s tax will bring in annually