Crossville Chronicle, Crossville, TN

Area News

March 10, 2014

Hotel tax audit considered

CROSSVILLE — Commissioners discussed how hotel/motel taxes are collected by the county after hearing a report that collections remain considerably below budgeted projections for the year.

Cumberland County Finance Director Nathan Brock reported to the budget committee only $424,357 has been collected this fiscal year, out of a total budgeted amount of $738,000. That is 57 percent of the budgeted amount for fiscal year 2013-'14.

"We are going to need a good spring and early summer if we are going to pull this thing out," Brock said.

Brock said, in comparison to the same time last year, collections are down in terms of actual figures by more than $20,000. Fiscal year 2012-'13 collections were at $443,014.

"I just have a problem with that number. You look around here any night of the week and these hotels are plumb full. That guy that came and installed that equipment down at the recycling center had a hard time even getting a hotel room and got the last one. And now that was in the middle of the week. Something just ain't right about that number. I'd like to know a little bit more about how that is collected," Mike Harvel, 7th District commissioner, said.

In January, John Kinnunen, 9th District commissioner, asked how the tax was collected, as well, and asked if it was an audited number.

Brock said, "It's really more of an honor system. The county could retain auditors to go in and assure compliance was being met."

It would cost extra to have the audit performed.

"There are companies that will audit areas like that for a fee, but they will be able to tell you if you are collecting the full dollar amount," Cumberland County Mayor Kenneth Carey Jr. said.

"Maybe we could check with other counties and see how they are doing it. We can see what they do and come back to this committee with the information," Brock said.

The committee agreed.

Brock reported property tax collections are at 94.7 percent at this point, compared to 90.4 percent last year.

"This is an excellent number and, to me, a good indicator on the economy. Comparing it to the percentage of the prior year is a fair comparison, so this looks good," Brock said.

He reported prisoner boarding collections were at $625,189, which is 59 percent of a $1,046,856 budgeted amount.

Brock also reported that local option sales tax collections were going well and that the county was $16,234 ahead of budget at this point for those tax collections.

The county has collected $4,811,094 of a budgeted figure of $7,898,741 for fiscal year 2013-'14. Local option sales tax collections go toward the general purpose school fund budget.

Fuel usage is also on track for the county and within the budgeted areas. The usage will continue to be monitored by the finance department.

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