Jefferson City sued by lodging association for improper tax rates
Marie Moyer
EDITOR’S NOTE: AI was used to help research the background for this story.
JEFFERSON CITY, Mo. (KMIZ)
The Jefferson City Lodging Association has filed a lawsuit against Jefferson City, the Jefferson City Area Chamber of Commerce and the Jefferson City Convention and Visitors Bureau, claiming the city’s 7% lodging tax violates Missouri law.
Jefferson City voters will decide whether to extend the tax on Tuesday.
The lawsuit, filed in the Circuit Court of Cole County, argues that the current 7% lodging tax exceeds the 5% limit set by Missouri law and improperly allocates money. According to court documents, the current lodging tax is divided, with 3% of the tax revenue used to fund the Convention and Visitors Bureau, and 4% allocated to the city’s conference center fund.
“With low occupancy there is no demand in the city for building a conference center and hotel,” Raman Puri, the Jefferson City Lodging Association President and owner of the DoubleTree by Hilton and the Holiday Inn said. “The use of lodging tax dollars is also not to be used to develop a lodging or convention project for the benefit of any developer. This tax should be used for procuring business for the city establishments.”
Petition in Jefferson City lodging tax lawsuitDownload
The Jefferson City Lodging Association is asking the courts for an injunction and restraining order to stop the city from collecting and using the tax money.
The Jefferson City Lodging Association represents hotel and motel owners in the city, whose guests pay the lodging tax. The lawsuit highlights that since the tax increase in 2011, around $13 million has been deposited into the conference center fund, which the association claims is not being used for its intended purpose of promoting tourism as defined by state law.
“Our interpretation of the statute, we’re confident what it is meets what their interpretation is,” said attorney, Vivek Puri, who represents The Jefferson City Lodging Association.
According to Raman, Mayor Landwier and Jefferson City Administrator Steve Rasmussen stated that when the 7% lodging tax was implemented in 2011, hoteliers were promised the tax would not go to the conference center or hotel for the city.
“If this was going to be the case, the hotel establishments would have never supported the lodging tax increase in 2011,” Raman said. “To use the lodging tax dollars for a construction of a hotel and conference center would be a direct competition for existing hotels that collect the tax. This is not fair or just.”
If the lodging association wins the case, all money collected for the conference center project will be reallocated to the Convention and Visitors Bureau.
“If declared constitutionally valid, a declaration that all ‘lodging tax’ deposited in the ‘conference center fund’ to date and collected and appropriated or to be deposited to ‘conference center fund’ going forward shall be used fully to fund the JCCVB,” according to court documents.
The city is set to vote on extending the 7% lodging sales tax for another 25 years on Tuesday.