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Albany takes a look at the hotel-motel tax

City officials are taking a closer look at a tax placed on visitors staying overnight at Albany hotels and motels, such as The Fairfield Inn & Suites by Marriott at 3011 Kensington Ct.

City officials are taking a closer look at a tax placed on visitors staying overnight at Albany hotels and motels, such as The Fairfield Inn & Suites by Marriott at 3011 Kensington Ct.

ALBANY, Ga. — Tacked onto the bills of visitors who stay overnight in Albany is a little-noticed charge levied by the city of Albany.

The discussion around that fee — the hotel-motel tax — has swirled since one of the beneficiaries of that tax, the Convention and Visitors Bureau, had its future questioned this week when local lawyer Phil Cannon called on the organization to split from the Albany-Area Chamber of Commerce.

In reality, the tax and what happens to the proceeds, is controlled largely by the city of Albany and regulated by the state through the Department of Community Affairs, according to James Stephens, an expert assigned to DCA’s Research and Surveys unit.

The CVB funds its annual budget through that hotel-motel tax proceeds that it shares with the city of Albany.

Under Georgia law, cities who choose to levy a 7 percent tax, have to give a minimum of 28.5 percent of the proceeds to an entity like CVB to promote or advance tourism and another 28.5 percent to operate and maintain conference centers, municipal auditoriums and civic centers.

According to the most recent report filed by the DCA, the city of Albany reported $1.4 million in hotel-motel tax dollars collected for the 2011 fiscal year.

During the same period, they paid $639,315 to “promote tourism, conventions and trade shows,” to the Chamber to run the CVB — or 45 percent.

Stephens says the disparity between the percentage the city gave the chamber for the CVB and the percentage required by law, doesn’t mean that the city is out of compliance with the law because the city operates and maintains the civic center and municipal auditorium on its own through a mixture of general fund and sales tax dollars.

“When you look up their tax reports...technically they should’ve put down how much they were spending to operate and maintain the auditorium and civic center,” Stephens said. “But as long as they’re spending at least 28.5 percent with the Chamber or some agent for tourism and they’re putting an amount equivalent to the remainder on the civic center and auditorium, I’d say they were meeting the requirement.”

While the 2011 report is rather scant, showing only those two figures, the FY2010 report is more detailed, including a profit-and-loss statement from the CVB.

In that fiscal year, the city took in $1.2 million in motel-hotel tax dollars and handed out $656,151 or 51 percent to the chamber for the CVB.

Of that, $234,928 was paid to employees and staff of the CVB for payroll and benefits.

More than $106,000 of the $215,000 in operating expenses was paid to the Chamber for “administrative fees,” the document shows.

A total of $271,688 was spent on marketing expenses.

In total, the CVB ended the year with a $40,000 deficit headed into FY2011.