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<br />1 <br />ORANGE COUNTYBOARD OF COMMISSIONERS <br />CARRBORO BOARD OF ALDERMEN <br />JOINT MEETING AGENDA ITEM ABSTRACT <br />Meeting Date:October 11, 2012 <br />Action Agenda <br />Item No.3 <br />SUBJECT: <br />Carrboro’s Vision for Use of the New Town Hotel Tax <br />DEPARTMENT:PUBLIC HEARING: (Y/N)No <br />Visitors Bureau <br />ATTACHMENT(S):INFORMATION CONTACT: <br />Town of Carrboro <br />NoneLaurie Paolicelli, Visitors Bureau, 968- <br />2060 <br />PURPOSE: <br />To receive information from Carrboro regarding itscurrent plansfor use of the <br />proceedsfrom the Town’s new hotel tax, and to discuss as necessarythe Town’s plans for use <br />of the tax proceeds. <br />BACKGROUND: <br />Since 1983, the North Carolina General Assembly has authorized many units <br />of local government to levy a room occupancy tax. In several instances, the General Assembly <br />has authorized both a county and a city within that county to impose an occupancy tax. The <br />rate of tax, the use of the tax proceeds, the administration of the tax, and the body with the <br />authority to determine how the tax proceeds wouldbe spent has varied considerably. The <br />county tax rate cannot exceed 6% and the city tax rate, when combined with the county rate, <br />cannot exceed 6%. <br />In 1991, theGeneral Assembly, in Chapter 392, Senate Bill 622 gave authority to the Orange <br />County Board of Commissioners to, by resolution, levy a room occupancy tax of up to three <br />percent (3%) on the gross receipts derivedfrom the rental of any room. <br />http://www.ncleg.net/Sessions/1991/Bills/Senate/PDF/S622v3.pdf <br />In 2001, by way of Session Law 2001-439, Senate Bill 92, the General Assembly gaveauthority <br />to the Town of Carrboro to levy an occupancy tax of 3%. The Town will enact its first <br />occupancy tax on the 142-room Hampton Inn scheduled to open in May 2013. <br />FINANCIAL IMPACT: <br />Using industry figures and projections, the Hampton Inn is expected to <br />generate the following revenue: <br />Based on an average daily rate of $100 over a one year period at a 6% tax rate (3% <br />Carrboro and 3% County), projected revenue is $186,588, or approximately $93,000in <br />tax proceeds to each jurisdiction. <br /> <br />