As the Ellijay City Council explores possibly raising the city’s hotel-motel tax rate at some point, councilmembers heard a presentation from Jennifer Grimmer, Gilmer Chamber president and CEO, during a workshop that preceded a Nov. 15 council meeting at City Hall.
Ellijay’s current base rate for the hotel-motel (or transient lodging) tax is 5 percent. The tax is to be paid by anyone staying at a hotel, motel or short-term rental property. A $5-per-night fee is also now added to lodging stays in Georgia, which goes toward funding earmarked for transportation projects.
The county’s rate is also 5 percent, while East Ellijay is at 3 percent, Grimmer noted.
“There’s 1-3 percent, 5 percent and 6-8 percent. Each of those three means something different,” she said about the levels of hotel-motel tax that can be implemented by Georgia cities and counties.
At the current rate, 60 percent of hotel-motel tax revenue goes to the city and 40 percent to the chamber, the only official destination marketing organization (DMO) for Ellijay, East Ellijay and the county.
If the tax rate is ever raised above 5 percent, it would allow a percentage of the city’s share to be used for tourism product development (TPD) projects, Grimmer told Mayor Al Hoyle and councilmembers Sandy Ott, Tom Crawford, Al Fuller, Katie Lancey and Kevin Pritchett.
“Six percent is the first level (where) you get access to that. It goes to the city and is specially restricted to projects deemed by the city attorney to be product development for tourists,” Grimmer said.
The wide range of TPD projects includes public rest rooms, way-finding signage, parking, lighting, safety, parks, trails, river access and beautification.
“It’s really all-encompassing. Basically, if it helps tourists and residents, you can use that money for it,” Grimmer said.
The amount of hotel-motel taxes in the county has almost doubled since 2019, partly due to a “huge influx” of new short-term rental properties, Grimmer noted.
“A ton of new vacation rentals have come on the market in the last two years, almost doubling the amount of cabins from 2018-2021. We have about 1,800 we can currently monitor in the county,” she added.
Another factor in the tax revenue increase is Georgia House Bill 317, which passed earlier this year and became effective in July. The state legislation changed the definition of a short-term rental, which is now classified the same as a hotel in terms of the lodging tax.
“As of July 1, the owner gets skipped over completely, and the Airbnbs and VRBOs of the world pay the city or jurisdiction directly. It’s really very hard to get out of paying that tax, where, prior to July 1, it was pretty easy to get out of paying (it),” Grimmer said.
The chamber has received more than $1 million in hotel-motel tax revenue between the two cities and the county this year alone, Grimmer noted. The funds must be spent in a year and used for promoting tourism.
“Looking at the checks that have come in prior to July 1 and after July 1, there are definitely a lot of people who were not paying taxes that are now paying taxes. It’s jumped up significantly,” Grimmer said.
Ott said the chamber presentation was requested so councilmembers could find out more about the hotel-motel tax rate levels and how funds could be used if an increase is ever requested.
“This was an information gathering presentation, and the chamber did an amazing job presenting the information. We wanted to learn more about the tax, what it can be used for and (its) impact,” she added.
The city council has yet to propose or vote on a hotel-motel tax rate change. The tax is paid by those staying at lodging facilities, and changing the rate would not mean a tax increase for local citizens, noted Ott.
Raising the rate above 5 percent would require an act of legislation from the state. House Speaker David Ralston has sponsored such legislation for Pickens and Fannin County, as well as the City of Blue Ridge, Grimmer said.
Pickens and Fannin County’s hotel-motel tax rate is 6 percent, while Blue Ridge is at 8 percent, she noted.
“Anybody with tourism as a strong part of their economy usually moves up because then they have access to TPD, which we currently don’t,” Grimmer said.
In other news ...
At the Nov. 15 council meeting, six on-premise consumption license renewals for beer, wine and distilled spirits were approved for the following locations: Kasei Sushi and Sake, Ellijay Wood Fired Pizza, The Roof, American Legion Post 82, River Street Tavern and Emily’s Bar and Restaurant.
A rezoning request for 283 North Main Street, from residential to general commercial, was approved.
Action on filling a vacancy on the city’s planning commission board was tabled until more applications can be obtained.