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From AVL Watchdog: Travel industry controls North Carolina’s room tax laws

A bill that would have changed the distribution of Buncombe County’s controversial hotel tax to better benefit local government is likely dead until at least next year.

The change would have reduced the share of room tax money to market and advertise Asheville as a tourist destination and increase the amount that could be used for local projects benefiting visitors and residents — a hot-button issue before COVID-19 and Black Lives Matter protests.

Sen. Chuck Edwards, a Henderson County Republican whose district includes part of Buncombe County, said the General Assembly’s focus on the pandemic sidelined the bill. Edwards said a measure could emerge in 2021.

As it is, the local share of the tax revenue is smaller in Buncombe than in most other North Carolina places that levy a tax and tourist destinations like Charleston, S.C., Charlottesville, Va., and Pigeon Forge, Tenn. And unlike in the neighboring states, no hotel tax money is available to pay for indirect costs of tourism, such as increased policing and maintenance of streets and sidewalks.

The 6% tax is charged on stays at hotels, motels, bed and breakfasts, vacation rentals and other short-term lodgings and paid to Buncombe County. But the county is required by law to turn the money over to the independent Tourism Development Authority, which is dominated by hospitality executives, an industry with considerable sway in Raleigh.

Three-quarters of the money goes to advertising and other forms of promotional media that directly benefit the industry, and one-quarter goes to what’s called tourist product development: Capital projects that are likely to attract more tourists to an area, such as construction of sports fields or greenways that also are enjoyed by local residents.