News From Terre Haute, Indiana

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July 10, 2013

CVB formulating plan to raise Vigo innkeeper’s tax

TERRE HAUTE — A provision approved this year by the Indiana General Assembly will allow the innkeeper’s tax in Vigo County to increase by three percentage points to 8 percent from 5 percent.

But just when and how quickly that new tax rate is implemented will be part of a financial analysis planned for the Terre Haute Convention and Visitor’s Bureau of Vigo County.

“I think we need to get a financial analysis before we go with an increase,” board member Greg Gibson said Tuesday.

The bureau was established in 1981 with a 2-percent innkeepers tax. That was increased to 5 percent in 1998. However, that tax rate increase was gradually implemented, with the full rate hitting 5 percent in 2004.

“We have been at the same funding level for nine years. The increase in funding is necessary to match the increase in events we’ve had over the years,” said David Patterson, Convention and Visitors Bureau executive director.

The bureau’s finances pay for a bond issued to develop the Bird/Gibson cross country course, for the mortgage on the bureau’s visitor building/track museum near Indiana 46 and Margaret Avenue and to marketing events.

“We will definitely refinance our bond, as rates have changed, which is just being good stewards of that money,” Patterson said. “We just have to find out what the best model for the implementation of the innkeeper’s tax is. Right now, we will continue as we are and we will review that.”

Any increase in the innkeeper’s tax must first be approved by the Vigo County Council.

An issue that the bureau’s board of directors had anticipated addressing included breaking away from a county ordinance that established the bureau to become a separate, nonprofit entity, without Vigo County acting as a bookkeeper and collecting the innkeeper’s tax.

However, it became a non-issue, Patterson said, as a state law has changed, allowing entities to be part of a county ordinance if their innkeeper’s tax is not higher 10 percent. Indianapolis has an innkeeper’s tax at 10 percent,

Patterson said the bureau could still seek to be a nonprofit entity sometime in the future, which would allow it more flexibility in spending and raising money.

In a related issue, Vigo County Attorney Michael Wright told the bureau board that it is his legal opinion the bureau does not have to annually submit a non-binding budget for review to the Vigo County Council. The bureau has two members appointed by the county council, two by county commissioners and one by the mayor of Terre Haute. The bureau’s board is authorized to make budget adjustments within its own budget amount.

Previously, the bureau would have to seek council approval for an additional payment, perhaps one that came in as little as $4 over a previously requested amount. That approval could take 90 days.

Reporter Howard Greninger can be reached at 812-231-4204 or howard.greninger@tribstar.com.

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