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January 16, 2014

Restaurant tax could bring in more than $2.3 million

City Tourism Commission to discuss funding options at Jan. 20 meeting

LAUREL COUNTY, Ky. — On January 20, the newly formed London Tourism and Convention Commission is expected to discuss how they plan to fund themselves during their scheduled meeting at City Hall.

At their last meeting, on December 11, members of the commission brought up questions of how they will be funded.

Jason Handy, chairman, informed the commission that currently they have two options for funding: they can enact a one percent transient room tax at the hotels and motels within the city limits or they can enact up to a three percent restaurant tax.

Cities of the fourth and fifth class are authorized by KRS 91A.400 to levy a tax on restaurant sales to fund local tourism commissions.  All money received from a restaurant tax must be turned over to the tourism and convention commission. 

According to the Kentucky League of Cities, only around 16 percent of cities allowed to levy a restaurant tax have chosen to do so.  Although restaurant taxes accounted for only one percent of total tax collection across the state, they provided $11.2 million in revenue in FY 2011.

According to statements by Mayor Troy Rudder and London-Laurel County Tourist Commission Chairman Tom Handy, a three percent restaurant tax could potentially generate as much as $2.3 million in Laurel County.

Based on the $2.3 million estimate for the potential three percent restaurant tax, if the commission decided to pass only a one percent restaurant tax, it would generate more than $766,600 in revenue for the tourist commission, nearly double what the county tourism commission operates on.

In addition to a restaurant tax, the city tourism commission is authorized to levy a one percent transient room tax at the hotels and motels located with in the London city limits.

According to reports from the London-Laurel Tourist Commission, the county tourist commission, they bring in approximately $422,000 through a three percent transient room tax.

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