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Huntsville City Council Considers Tax Hike For Area Hotels

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HUNTSVILLE, Ala. (WHNT) - Huntsville City Council members are tossing around the idea of a tax hike for area hotels.  Council members say the extra money is needed to get bigger and better conventions for the Rocket City.

The increase would be one percent, all in the name of increased tourism.

"It's not ideal, but at the same time, I've got to admit this is more of a necessity than you think," said Patrick Wheeler.

Wheeler runs the Sleep Inn & Suites on University Drive, and says the potential one percent tax increase will not have a negative impact on occupancy rates, which have steadily grown since his hotel's doors first opened three years ago.

"Basically I don't think it's going to affect someone saying 'I'm not gonna come to Huntsville over it'," said Wheeler. "Compared to other cities within a couple hundred miles, we're already on the low end of the spectrum."

Huntsville's current 12 percent tax rate is among the lowest in the southeast, with nearby competitors Nashville, Birmingham, Atlanta and Jackson all two to five points above it.  City Councilman Bill Kling says raising the rate to 13 percent will bring in more than $800,000 per year, which will go exclusively to recruiting and hosting efforts for conventions at the Von Braun Center.

"The idea is to get more and bigger conventions to Huntsville, so if this will help, we'll let the out-of-town folks pay for it," said Kling.

A group of hotel area managers have already endorsed the tax hike, which will be discussed by city council members next month.  Councilman Kling says there's already been talk of potential convention pickups if the increase is approved.

"I think one of the things we'd like to get is the National Bass Fishermans Association convention in Birmingham, and Birmingham is a nice city, but take a look at Huntsville, see what we have," said Kling.

Officials say half of all current lodging tax revenue in Huntsville goes to tourism and recreation projects.  The other half is divided between the State of Alabama, the U.S. Space and Rocket Center, and the Alabama Mountain Lakes Tourist Association.

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