Grove City Council Approves placing 5% Grove Hotel Motel Room Tax on November 4th Ballot

After many attempts to propose and pass a room tax for the City of Grove, it appears that this council under the leadership of new city manager Bill Keefer has proposed a reasonable ordinance that the citizens of Grove should fully support.

The last attempt by the Grove City Council was half baked from the beginning, proposing to authorize then city manager Bruce Johnson to review financial records of Grove businsees at will, and if Johnson did not believed the records, he could assess the motel with a levy as to what he thought the books should say.

City manager Keefer has corrected this error as well as many others.

With no substantial objections from the audience, the ordinance is to  be placed on the Nov 4th ballot.

 

The following memo to Grove City Council details of the room tax proposal from Keefer.

 

TO: Mayor and Council,

FROM: Bill Keefer, City Manager

RE: Hotel Tax

During the retreat/goal setting session last fall, one of the goals that was identified was the

implementation of a hotel/motel tax to promote tourism for the City of Grove. In pursuing this

goal, Staff identified early on the need to seek input and advice from the hotel industry on this

topic to ensure they have a voice in this discussion. Hence, over the past 6-8 months, Staff has

been working with several representatives of the local motel industry to review and discuss

issues, concerns and desires related to a hotel tax. Those discussions have included but not

limited to the following:

• reasons and rationale for their opposition to previous efforts to implement a hotel tax;

• answering questions and concerns regarding the hotel tax and how the ftmds would be

collected and used;

• discussions on who and what should be included in the definition of a “hotel”;

• identifying the need for and benefits from the implementation of a hotel tax;

• discuss and review several drafts of an ordinance implementing the provisions of a hotel

tax.

Attached for the Council’s review and consideration is an Ordinance levying a hotel tax and

setting an election date, as well as how a hotel tax would be implemented and used. The key

components are as follows:

• Subject to a special election, implements a 5 % sales tax (hotel tax) on gross receipts

from the rent of hotel rooms as defined in the Ordinance;

• Defines a hotel and what entities will be required to collect the hotel tax;

• Designating the State Tax Commission to collect the hotel tax per H.B. 1874 as approved

in the 2013 Legislative session;

• Creates a Convention and Tourism Bureau to administer and oversee the operations of

the Bureau;

• Sets forth the means to appoint the five members to the Bureau and identifies that three

members will represent the hotel industry and 2 members will represent the tourism

industry;

• Outlines the duties and responsibilities of the Bureau;

• Outlines how the hotel tax funds are to be expended;

• State’s that the effective date will be January I, 2015 and there is not termination date.

Also attached for the Council’s review and consideration is a Resolution calling for a special

election on November 4, 2014 to consider a question to implement a 5 % hotel tax. The special

election would be part of the state’s General Election on that same date which in turn would save

the City costs to fund a standalone special election. The Resolution primarily authorizes the

election and identifies the question for consideration by the qualified electors of the City of

Grove.

For this process to move forward and be on the ballot in November, the Council will need to

approve both the Ordinance and the Resolution. In turn, a copy of the executed Resolution must

be returned to the County’s election Office by 5 PM on Wednesday, August 20th to be included

on that ballot.

If the Council approves the Ordinance and Resolution authorizing an election on November 4th,

the City will need to prepare a plan to provide information to the community so they can make

an informed decision on this important issue. This could include public meetings to provide

information and answer questions; speaking at meetings of various clubs and organizations;

posting information on our website, etc. The Council will recall that the City cannot expend

public fnnds to “promote” the special election question.

 

 

ORDINANCE NO.

AN ORDINANCE LEVYING AND ASSESSING A SALES TAX OF FIVE

PERCENT (5%) IN ADDITION TO PRESENT SALES TAXES UPON THE

GROSS PROCEEDS OR GROSS RECEIPTS DERIVED FROM RENTS

RECEIVED FROM OCCUPANCY OF HOTEL ROOMS, PROVIDING

FOR USE OF TAX FUNDS; PROVIDING FOR TAX RATE; PROVIDING

EXEMPTIONS; REQUIRING APPROVAL OF ORDINANCE BY

MAJORITY OF REGISTERED VOTERS VOTING AT AN ELECTION

HELD FOR SUCH PURPOSE AS PROVIDED BY LAW; FIXING

EFFECTIVE DATES; AND CONTAINING OTHER t>ROVISIONS

RELATED THERETO.

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GROVE,

OKLAHOMA:

ARTICLE I. Subject to the approval by a majority of the qualified electors of the City of

Grove, Oklahoma, at an election to be held on November 4, 2014, Part 7, Finance and Taxation,

Chapter 7, Hotel Tax, Section 7-701 thru 7-713 of the Code of Ordinances of the City of Grove,

Oklahoma is hereby added to read in its entirety as follows:

Section 7-701: Citation and Codification.

This Ordinance shall be known and cited as the City of Grove Hotel Tax Ordinance.

Section 7-702: Definitions.

As used in this Ordinance:

“Business” shall mean any business that has a current occupational license to conduct

business within the City of Grove.

“City” shall mean the City of Grove, Oklahoma.

“Hotel” shall mean any building or buildings, structures, trailer, or other facility in which

the public may, for consideration, obtain sleeping accommodations, and in which two or more

rooms are used for the accommodation of such occupant whether such rooms are in one or

several structures. The term shall include hotels, motels, inns, resorts and bed and breakfasts.

The term shall not include hospitals, sanitariums or nursing homes.

“Occupancy” shall mean the use or possession, or the right to the use or possession of

any room or rooms in a hotel, or the right to the use or possession of the furnishings or the

services and accommodations accompanying the use and possession of the room or rooms.

“Occupant” shall mean the person, who for a consideration, uses, possesses, or has the

right to the use or possession of any room or rooms in a hotel under any lease, concession,

permit, right of access, license to use, or other agreement.

“Operator” shall mean any person operating a hotel within the city, included, but not

limited to, the owner, proprietor, manager, lessee, sublessee, mmigagee in possession, licensee,

or any other person otherwise operating such hotel.

“Person” shall mean any individual, corporation, company, partnership, voluntary

association, firm, club, society, organization or any other entity of whatever kind or nature.

“Resort” shall mean a place where people go for vacation and/or recreation. A resmi

may have various types of temporary lodging accommodations such as hotels, motels, guest

rooms and cabins designated for overnight lodging of guests for an established rate or fee.

“Rent” shall mean the consideration received for occupancy valued in money, whether

received in money or otherwise, including all receipts, cash credits, and property or services of

any kind or nature, and also any amount for which credit is allowed by the operator to the

occupant, without any deduction therefrom whatsoever.

“Room” shall mean any room or suite of rooms of any kind in any pmi or portion of a

hotel which is available for or let out for use or possessed for any purpose other than as a “place

of assembly.”

“Tax” shall mean the tax levied pursuant to this Ordinance.

“Tourist Attraction” shall mean an Eligible Attraction as defined by the Oklahoma

Department of Transportation’s Tourist Oriented Directional Signage (TODS) guidelines.

Section 7-703: Tax Rate.

There is hereby levied an excise tax of five percent ( 5. 0%) (in addition to any and all other

excise taxes now in force) upon the gross proceeds or gross receipts derived from all rent for

every occupancy of a room(s) in a hotel as defined in Section 7-702.

Section 7-704: Exemptions.

(a) Occupancy. The following shall be exempt from the tax levied in this Ordinance:

(1) The United States Government or any agency or division thereof when

paid directly by the United States government;

(2) The State of Oklahoma or any political subdivision thereof when paid

directly by the State of Oklahoma or any political subdivision;

(3) Any public school or state-accredited private school when paid directly by

the school, provided that its primary purposes in not canying on a

business for profit; and

(4) Any church when paid directly by the church, provided that its primary

purposes in not carrying on a business for profit.

Section 7-705: Tax to be Sepamtcly Designated on Bills.

The operator shall separately designate, charge and show the tax on all bills, statements,

receipts or any other evidence of charge or payment of rent for occupancy issued or delivered by

the operator. In the absence of a certificate of exemption or the approved use of a federal, state

or local government/public school credit card for payment, it shall be presumed that the rent on

all occupancies is taxable.

Section 7-706: Opemtor’s Duties.

(a) Operator responsible for collections. The operator shall be responsible for the

collection of the tax from the occupant which shall be held in trust by the operator until

paid to State of Oklahoma Tax Commission per their collection and payment regulations

for this purpose.

(b) Records to be kept. Operator shall keep records of each occupancy and of all rent

paid, charged, or due thereon and of the tax payable thereon in such form as maybe

required by the State Tax Commission per their regulations.

Section 7-707: Use of Fnnds.

All taxes collected pursuant to provisions of this Ordinance shall be placed in a special

revenue fund of the city known as the City of Grove Tourism Development Fund, and

appropriated ammally by the City Council based upon a budget developed by the Bureau and

used exclusively for the purpose of encouraging, promoting, and fostering conventions and

tourism; marketing the Grove community; assisting with the promotion and support of

community events and activities; and special projects as deemed appropriate by the Bureau.

Section 7-708: Creation of Convention and Tourism Bureau

The City of Grove Conventions and Tourism Bureau is hereby created. The said Bureau

shall be composed of five (5) members. The members of the Bureau shall consist of the

following: three (3) members representing the hotel industry as defined in Section 7-702; and

two (2) members representing Tourist Attractions as also defined in Section 7-702.

The Bureau members shall be appointed by the Mayor, subject to a majority vote of the

City Council. The Council appointed members of said Bureau shall be for terms of three (3)

years. Provided, however, the Council shall appoint two members for an initial term of one year,

two members for an initial term of two years, and one member for an initial tetm of three years.

The term of each member shall be determined by lot at the first meeting of said Bureau.

Successor members at the completion of their initial tenn shall be appointed for the full term of

three years. In the event of a vacancy occurring on said Bureau, it shall be filled by appointment

by the Mayor, subject to a majority vote of the City Council. For appointments to fill vacancies

of unexpired terms and term completions for members representing the hotel industry, the

Bureau shall provide a recommendation(s) for consideration by the Mayor and City Council.

No one entity within the hotel industry as defined within Section 7-702, shall have more

than one representative serving on the Bureau at any time.

Any member appointed to the Convention and Tourism Bureau under the provisions of

this Ordinance may be removed for cause upon a majority vote of the Grove City Council.

Section 7-709: Organization of the Convention and Tourism Bm·eau- Powers and Duties.

The City of Grove Convention and Tourism Bureau shall meet within thiliy (30) days of

its appointment and shall be organized by electing a Chairman, Vice-Chairman and Secretary.

Thereafter, the Bureau shall meet as often as may be necessary, and also shall be subject to a call

of a special meeting by the Chairman.

The Bureau shall adopt such administrative rules and regulations as they deem necessary

and expedient for the proper operation of said Bureau, and shall have the authority to alter,

change or amend such rules and regulations at their discretion so long as the administrative rules

and regulations are not in conflict with the ordinances of the City of Grove, Oklahoma State

Statute and Federal law.

The Bureau hereunder appointed shall have the authority to develop a budget with

approval of the City Council, and utilize revenues collected and deposited to the City of Grove

Tourism Development Fund for tourism promotion of the City of Grove. Tourism promotion of

the City of Grove shall be defined by the Bureau to mean any activity as identified under Section

7-707.

The Bureau hereunder appointed, in addition to their other powers provided herein shall

have all lawful and incidental powers necessary for achieving the purposes of this Ordinance.

Section 7-710: Amendments.

The people of the City of Grove, Oklahoma, by their approval of this Ordinance at the

election hereinabove provided for, hereby authorize the City by Ordinance dnly enacted to make

such administrative and technical changes or additions in the method and manner of

administration and enforcing this Ordinance as may be necessary or proper for eniciency and

fairness, except that the rate of the tax herein provided for shall not be changed without approval

of the qualified electors of the City as provided by law.

Section 7-711: Provisions Cumulative.

The provisions hereof shall be cumulative and in addition to any and all other taxing

provisions of City Ordinances.

Section 7-712: Severability.

The provisions of this Ordinance are severable, and if any part or provision hereof shall

be adjudged invalid by any court of competent jurisdiction, such adjudication shall not affect or

impair any of the remaining parts or provisions hereof.

Section 7-713: Effective Date and No Termination Date.

The provisions of this Ordinance and the collection of the excise tax referenced herein

shall become effective on and after Janna1′Y 1, 2015, subject to approval by a majority of the

qualified electors of the City voting on the same in the manner prescribed by law. The

provisions of this Ordinance and the collection of the excise tax referenced herein shall have no

termination date.

ARTICLE II. Any ordinance or parts of ordinances of the City of Grove, Oklahoma,

found to be in conflict herewith are hereby repealed.

 

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