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County hotel tax reaping profits

September 20, 2002|by STACEY DANZUSO

chambersburg@herald-mail.com

CHAMBERSBURG, Pa. - A hotel occupancy tax that Franklin County began levying at the beginning of the year is meeting expectations.

For the first six months of the year the county collected more than $175,000, said Phil Tarquino, county planner.

Of that, about $3,500 will go toward administration and $69,000 to the Capital Region's Vacation Bureau for tourist promotion. The remaining $103,000 will stay in the county and be distributed to nonprofit agencies through a granting program, Tarquino said.

"The grant hearings will be sometime in 2003. We will have to have guidelines developed and a work session and training session for eligible applicants," he said.

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County Administrator John Hart said there is no time frame at this point for awarding the funds.

He said the county plans to take applications from groups once a year and award the funds much as it handles the annual Community Development Block Grant funds it receives from the state.

"We had some inquiries from various organizations interested in the money and wanting to know they are eligible and when they can apply," Tarquino sad.

He has not heard any complaints about the tax and figures most travelers are used to seeing it on their bills elsewhere.

"Most counties have already implemented the tax at this point," he said.

In December, the Franklin County Commissioners established the 3 percent local tax on hotel room rentals.

The tax is expected to generate about $400,000 to promote tourism in the region, with 60 percent going to the county to support local nonprofit tourism efforts and 40 percent to the vacation bureau to push regional tourism for South-Central Pennsylvania.

With about 1,400 hotel rooms in Franklin County renting for an average of $50 a night, the 3 percent tax adds $1.50 to the average hotel room cost.

That will bring in $386,000 annually if 50 percent of rooms are occupied and a maximum of $772,000 with 100 percent occupancy, according to county figures.

Tarquino and L. Michael Ross, president of the Franklin County Area Development Corporation, expect the county will reach the $400,000 threshold by the end of the year.

"Based on talking to hoteliers, the third quarter will be the biggest one," Ross said.

The commissioners had considered establishing the tax since early 2001 when the state approved legislation allowing counties as small as Franklin to levy a local tax.

The 3 percent tax is in addition to the 6 percent tax the state collects on hotel rooms.

The tax was appealing to local officials because tourists would be the ones shouldering the burden, and the proceeds could help local arts councils, museums or special projects that would attract tourists.

People who occupy a hotel room for more than 30 consecutive days are exempt from the tax.

The only other exceptions are ambassadors, ministers and consular officers of foreign governments, and federal, state or local government employees renting a hotel room for official business purposes.

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