By John Estridge (an analysis)
Analysis
Over the years, many, many county officials in Indiana have tried to understand the Indiana Code associated with the Innkeepers Tax.
Even attorneys have admitted the wording is “clunky” or “dense” or other similar descriptive words.
Ostensibly, the Innkeepers Tax is a good tax for local governmental officials to enact because it does not negatively affect local residents, and local residents can derive benefits from the expenditure of its revenue. Anyone who travels around the country has been affected by the local tourism- and local economically-related taxes of this sort.
Look at hotel and motel bills from anywhere one visits in the U.S., especially Gatlinburg and Pigeon Forge, and there is usually an array of taxes of that sort near the end of the bill, running a $100 room up to about $130 or so.
In Indiana, this is an old tax, but it has been enacted locally relatively recently. According to the Indiana Department of Revenue website, Union County has a 5 percent tax and began collecting it on January 1, 2018. The earliest it was enacted in Indiana was 1966 by Marion County. Marion County also has the highest tax rate at 10 percent.
According to the initial meeting of the Union County Innkeepers Board on Thursday evening, December 3, Union County has collected about $112,000 and continues to collect money at the rate of about $30-40,000 per year.
Money is collected by the innkeepers within the county and then sent to the Union County Auditor’s Office.
What the board, in Union County it is a three-member board, can spend its money on is severely limited by Indiana Code.
According to Indiana Code 6-9-19-6, “after its approval of a proposal, transfer money, quarterly or more frequently, from the fund established under section 4 of this chapter to any Indiana not-for-profit corporation to promote and solicit conventions, trade shows, or visitors in the county.”
That means a not-for-profit organization can spend the money on advertising related to tourism, festivals and events that promote the county and/or the tourism associated with that county. In other counties, it has been used to develop tourism-related websites, help fund festivals and advertise the county in any number of ways.
In Franklin County, in 2020, a Cincinnati television station was to come into the county and film tourism-related commercials to promote the county’s tourism industry. But then the COVID-19 hit.
Locally, at that initial meeting, the board voted to give $30,000 to the Union County Bicentennial Committee and $10,000 to Union County Development Corporation.
The former is putting on a Bicentennial celebration in the various towns within the county between June 27 and July 11.
And the latter is to create a Union County Guide and to advertise for local events such as the annual festivals including but not limited to the Liberty Festival and Christmas in our Hometown.
After expending the money, the various organizations receiving the money must submit detailed reports to the Innkeepers Board of those expenditures.
Due to the conditions and limitations put on money used in this manner, the UCDC, since it is a valid not-for-profit organization, will act as a conduit holding the money for the Bicentennial Committee, which does not have a 501 (c) 3 designation, until it is needed.
