Updated with additional information.

CLARKSVILLE, TN (CLARKSVILLE NOW) – A 2.75% privilege tax was approved during Thursday night’s City Council regular session meeting, and with the council’s approval, the tax increase will add to local hotel-motel charges within the city limits.

During the meeting, Mayor Joe Pitts motioned for the ordinance to be amended to accomplish three things: lower the proposed tax percentage, move the effective date of the ordinance, and remove the Customs House Museum from the ACT Authority for the time being. Originally, the ordinance asked for the hotel-motel privilege tax to be set at 4%. However, after further analysis, Pitts motioned for the rate be reduced to 2.75% instead.

In addition, after speaking with hoteliers, Pitts motioned for the effective date of the ordinance to be pushed back until Jan. 1, 2025. This way, hoteliers can fulfill the contracts they have in place for calendar year 2024, according to a previous report. As for the Customs House Museum being removed from the ACT Authority, this was done to give them time to plan for the change and will not affect their funding.

The City Council approved the amendment 9-1, with Wanda Allen voting against it. The tax itself passed on second reading 6-4. Voting yes were Brian Zacharias, Deanna McLaughlin, Wanda Smith, Stacey Streetman, Keri Lovato and Mayor Joe Pitts. Voting no were Ambar Marquis, Travis Holleman, Wanda Allen and Karen Reynolds. Wallace Redd, Dajuan Little and Joe Shakeenab were absent.

The new hotel-motel privilege tax will now help fund the renovation of the Roxy Regional Theatre as the City of Clarksville looks to transition the building into a Performing Arts Center.

Other proposals presented

While discussing the proposed tax increase, Streetman and Reynolds both tried to amend the mayor’s original amendment, but in different ways.

Streetman’s amendment looked to raise the proposed 2.75% tax to 3.2% as inflation continues to grow. However, it was voted down 8-2.

Meanwhile, Reynolds’ amendment looked to reduce the proposed 2.75% tax to 2%, but if it were to pass, it would have killed the Performing Arts Center in its tracks, according to Pitts during the meeting. When it came time to vote, Reynolds’ amendment was voted down as well.

‘It was obviously disappointing’

After the meeting, Clarksville Now spoke with Roshan Patel, a local hotelier, who said the ordinance’s outcome was disappointing.

“We spent a couple of private meetings with Mayor Pitts, and we talked about how we want to be a part of the development; we want to help,” Patel said.

“Our standpoint was 2% got everyone happy, while keeping it at the same level as our neighbors to the west of us in Pleasant View. So, we thought (the total hotel tax rate) staying at 19.25-19.5% would be a better tax when it’s below 20%.”

With the 2.75% tax approved, the total tax rate in Clarksville reaches 20.25%. The total tax rate includes state and county sales tax (9.5%), the existing hotel tax rate (8%), and the approved additional 2.75%.

When asked what’s next, Patel said there’s really nothing they can do now but continue to do their best to showcase what Clarksville has to offer through RFP’s and tour operators. “Hopefully this doesn’t affect their decision making when looking at staying in Clarksville or going down the street,” he said.

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