Lexington Town Council Unanimously Approves 3% Accommodations Tax to Fund Local Services

New Accommodations Tax on the Horizon for Lexington

The town of Lexington, the largest municipality in Lexington County, is gearing up to implement a brand-new tax, but there’s no need for local residents to worry. During a recent meeting, the Lexington Town Council unanimously agreed to introduce a 3% accommodations tax that will be applied to every hotel stay within the town’s borders. This step is set to receive its final nod of approval next month, making it an exciting prospect for both the town and its visitors.

A Shift in Funding

So why the change? The town is moving forward with its own accommodations tax because a previous 3% tourism development fee for hotels ended as part of a 25-year agreement between Richland and Lexington counties, which was set up to help fund the Columbia Convention Center. While some other areas in Lexington County, including the county government itself and the cities of Cayce and West Columbia, already have their accommodations taxes in place, the town of Lexington has its own vision for the revenue. Instead of focusing solely on tourism promotion, the town council has grander ideas about how to utilize the approximately $400,000 anticipated each year from this tax.

Focusing on Local Needs

During discussions about the tax, the Town Council highlighted a variety of potential avenues for using this revenue to bolster essential services and potentially relieve the local property tax burden on residents. Mayor Hazel Livingston expressed her enthusiasm, stating, “I like this because it can put some money into the police department for others, and it comes from our visitors in the town to where we can possibly give a reduction in our millage.” She emphasized the importance of not increasing the town’s millage rate while still allowing for necessary projects, including road maintenance.

Understanding the Tax Structure

It’s worth noting that this accommodations tax is distinct from the hospitality tax that Lexington already enforces, which is set at 2%. The hospitality tax applies to all purchases of prepared food and drinks at local restaurants, while the new accommodations tax specifically targets hotel stays, making it a little more focused in its reach. The hotels operating in Lexington, which number seven at present, will feel the brunt of this new tax.

Concerns from Local Hotels

During the meeting, Assistant Town Administrator Stuart Ford shared that he had communicated with six of these hotels. Their main concern? They worry that adding this new 3% accommodations tax might hurt their competitive standing against cities like Columbia, where similar taxes exist. However, these hotel representatives also acknowledged the importance of generating funds for tourism promotion in town in any way possible.

Moving Forward with Collaboration

Ford reassured council members that the hotel operators are more than willing to collaborate in order to ensure the tax’s implementation is smooth and straightforward. “They also expressed a desire for us to administer the ordinance very easily and efficiently for them, and so we’re going to work to make it as seamless for them to comply over time,” he stated. This commitment to a manageable process reflects a willingness to prioritize the local businesses while still generating essential revenue for town services.

A Bright Future Ahead

As Lexington prepares for the final approval of this accommodations tax, it’s clear that the move is about striking a balance between encouraging tourism and addressing local needs. With new resources on the horizon, this could very well pave the way for improved services, better roads, and a reduced property tax burden—all while keeping the town friendly and inviting to visitors from near and far.