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Tourism taxes less than expected

Thu., May 13, 2010

Two groups dealing with shortfall

Two Spokane groups are trying to deal with an unexpected decline in money from a countywide hotel-motel tax that increased last fall.

Both the Spokane Regional Convention & Visitors Bureau and the Spokane Regional Sports Commission said initial budget figures for 2010 suggest they could receive a reduction of roughly 20 percent in their expected revenue from the taxes.

The groups are asking state officials whether the shortfall is due to faulty data or if hotels in the county have not collected the higher fee.

Spokane County hotels and motels have collected a TPA (tourism promotion area) room tax for several years. Last fall Spokane’s association of hotels and motels boosted the room rate to $2 per room per night. Before that, it was $1.50 or 50 cents per room per night, depending on the location. Hotels or motels with fewer than 40 rooms are exempt.

About half the annual budget of the CVB’s and 40 percent of the Sports Commission’s budgets rely on TPA dollars.

TPA taxes go to the state Department of Revenue and then are disbursed to Spokane County two months after collection.

Louise Barnett, administrative manager of the CVB, said Spokane’s TPA collections from February came to a little more than $145,000. But data from the STAR Report, the hotel industry guide for tracking room occupancy, suggest $200,000 should have been collected, Barnett said.

“So the question we’ve been asking is, was my estimate just based on wrong facts, or is there a problem in the collection?” she said.

No direct cuts or reductions in operations at the CVB have been necessary yet, but if the trend continues that will change, said Barnett.

Spokane Regional Sports Commission Executive Director Eric Sawyer said the TPA drop-off has left a 40 percent crater so far in the group’s budget. He’s had to let go two recently hired workers who were developing new sports marketing plans, he said.

Mike Gowrylow, a spokesman for the Department of Revenue, said the only way the state can discover unreported or uncollected TPA fees is by direct audit.

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