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The Tennessee Conservative Staff –
The Knoxville City Council is set to consider a proposal that would increase the tax rate on hotel and motel stays when they meet on November 12.
The proposed amendment to the city’s hotel occupancy tax would raise it from the current 3% to 4% and change how the revenue can be used.
Currently, the 3% tax on hotel and motel stays within Knoxville city limits is earmarked specifically for debt payments on the Convention Center, a practice that has been in place since 2000.
The proposed change would allow the revenue to be directed toward tourism-related initiatives, including upgrades to the Knoxville Civic Auditorium and Convention Center, Worlds Fair Park, and other tourist facilities. There would no longer be a requirement to use those funds to pay the Convention Center debt.
According to city officials, the current hotel and motel tax generated around $6.7 million in the 2023-2024 fiscal year. Increasing the tax by an additional 1% could have boosted revenue by approximately $2.2 million, with the majority of that hotel tax being paid by visitors to the city.
If approved after the required first and second readings, the new tax rate would take effect on Jan. 1, 2025.
