Raising the hotel tax has been a conversation since 2004 when Frederick County was given the go-ahead from the state to increase the tax to five percent.
“What jumpstarted the discussion most recently was in connection with the Downtown Hotel Conference Center that has been proposed,” said John Fieseler, Executive Director Frederick Tourism Council.
Republicans and democrats are split on the issue. Republicans say they are against the move because of a possible rebate up to 85% to the proposed downtown Frederick Hotel and Conference Center from the money collected from the hotel tax.
“Say there are 50 hotels in Frederick, they could’ve gone out to any of those hotels and said hey we’ll give you 85% of the hotel tax we collect but they didn’t. They went to the one in downtown Frederick,” said Councilman Billy Shreve.
Shreve is talking about a provision that gives a rebate of up to 85% back to new hotels that meet certain requirements involving public infrastructure.
But Councilwoman Jessica Fitzwater says the county council strictly voted to increase the hotel tax from 3% to 5% versus focusing on the Downtown Hotel and Conference Center.
“In the MOU, there is a statement about a hotel incentive fund that says up to 85%may be given to public infrastructure so this isn’t money going back to any private developer,” said Frederick County Councilwoman Jessica Fitzwater.
According to Councilwoman Fitzwater, most of the money generated from the hotel will be go to the tourism council.
Officials say the hotel tax increase will allow more money to go into tourism. From there, the tourism council will evaluate effective strategies to bring more visitors to Frederick County which means a booming local economy.
“This is really a win for all of Frederick County mainly because it’s going to increase the dollars that we can spend towards tourism sort of like a marketing budget for Frederick County. This tax is not going to be paid for by Frederick County residents but by visitors who come to Frederick County,” said Fitzwater.
Officials say even with the tax increase, the new rate is lower than neighboring counties.
The new tax rate will go into effect by late October.