State News

December 23, 2013

Reporting lags in state's hotel-motel tax program

ATLANTA — Dozens of cities and counties across Georgia are authorized to collect money through a lodging tax on hotel and motel guests in their area, but state officials say they are unable to provide the total amount generated annually through the program or account for how every dollar has been spent due to incomplete reporting by local governments who can sometimes take years to file the reports.

Communities as big as Atlanta and Savannah and as small as Alma and West Point are authorized to collect the tax, which can range from 3 to 8 percent depending on local rules. At the very least, tens of millions of dollars are collected across the state each year through the program with Atlanta planning to set aside roughly $200 million of its hotel tax revenue to help fund a new Falcons stadium downtown and Cobb County to use $940,000 annually for 30 years to help pay its portion of a new Braves stadium.   

State law requires communities imposing a hotel-motel tax to report how much was collected, at what tax rate and how it was spent but several each year since 2008 have not filed a report, according to data compiled by the Department of Community Affairs, the agency charged with receiving the reports. Built into the law is the possibility that a government could lose its ability to collect the tax for failing to report the information to the state, something that is required within 180 days of the end of its fiscal year.

But agency officials say a combination of factors including varying end dates for fiscal years and staff turnover on the local level has meant that many communities take years to file their reports, and the state tally remains incomplete. For instance, 14 communities authorized to collect the tax in 2008 have not filed a report with the state as of Dec. 5, well beyond any 180-day period. The agency has placed an emphasis on bringing non-reporting communities into compliance, and officials said the department doesn’t have a legal mechanism to enforce reporting.

“We still have reports coming in from 2010,” said Saralyn Stafford, spokeswoman for the Department of Community Affairs. “We are not a compliance agency, so there is not a specific penalty with being late in filing.”

Stafford said it’s possible some of the non-reporting governments simply didn’t collect a tax but couldn’t say for sure whether that was the case for each one. That was true for Newton County, which was listed by the state as not having filed a report between 2008 and 2012. Lisa Conner, administrative assistant to the Newton County Board of Commissioners, said the county doesn’t have any hotels or motels.

Officials in Atlanta, Savannah, Alma, West Point and Cobb County all filed their reports in recent years, according to the state. Among those that haven’t filed between fiscal year 2008 and fiscal year 2012, the list varies. Only a small number are the same year after year. More common is for communities to miss a year here or there. In 2009, 12 communities were listed as not having filed a report with the state, seven communities for 2010, 14 for 2011 and 44 for 2012, according to the Dec. 5 state tally.

For those who simply haven’t filed, the agency continues to encourage them to turn in the reports, sending out periodic reminders. Stafford said those efforts generally produce a response.

“Most of our governments do operate in good faith, and we work with them on that basis,” Stafford said. “We do not see this as a big issue of non-compliance. We think most of our local governments are getting the data to us. It just takes them sometimes longer than the official reporting period.”

One city, Chattahoochee Hills, was listed as not having filed a report for fiscal years 2009, 2010, 2011 and 2012. City Finance Director Kyle Jones said the reports for 2010 and 2011 were filed and was not sure why they were not listed as such by the state. He said he did not know why the 2009 report wasn’t filed since that was before he was hired, and said he has since filed the 2012 report. The department said the city’s reports for 2010, 2011 and 2012 were received after the Dec. 5 report was compiled.

Stafford said the department is not required under the law to produce an annual compliance report and shares oversight of the program with the Department of Audits and Accounting and the Department of Revenue.

In fact, the department’s only report was generated for recent training and showed that at least $157 million in hotel-motel tax revenues were generated in 2008, $138 million in 2009, $192 million in 2010, $149 million in 2011 and $250 million in 2012. But agency officials cautioned those are not complete numbers.

“This is based on what is reported to us,” said John Turner, director of the department’s community development division who added that the agency doesn’t verify the accuracy of the reports. “We didn’t intend this report or any of the others we got to be an exhaustive, comprehensive collection of the revenue picture in the state because we just don’t have the means to do that.”

Both Stafford and Turner said they were unaware of any attempts by the state to restrict a community’s ability to collect the tax as a result of failing to file a report. Turner noted the agency doesn’t have the authority to do that.

“Our emphasis is on trying to assist governments with this responsibility and we do as much training as we can throughout the course of the year for local governments to try to make them aware of this and help them with any issues they may have,” Turner said. “We’re not in the enforcement business, that is not the emphasis we have here in this office.”

Nick Genesi, a Department of Revenue spokesman, said the agency does not track hotel-motel funds, calling it local tax money. State Auditor Greg Griffin said local governments are required to report collections under the hotel-motel tax program to his agency as part of their annual financial audit reports. Griffin said his agency refers any communities not in compliance to the Department of Community Affairs, which would be responsible for taking any action. Griffin said his agency does not keep a summary of total collections.

William Perry, executive director of the government watchdog group Common Cause Georgia, said the lack of accounting is troubling and planned to ask state lawmakers for a better plan to track the funds.

“I’m shocked that there is not more accountability in that process,” Perry said. “If you don’t know how much money is supposed to be there, how can you account for how it has been spent?”


Follow Christina Almeida Cassidy on Twitter:—Christina.


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