Lexington Town Council Approves New 3% Accommodations Tax to Benefit Local Services

The Town of Lexington Implements a New Accommodations Tax

In a fresh move to better serve its residents, the Town of Lexington is on track to introduce a new tax that is creating quite a buzz. During a recent meeting, the Lexington Town Council unanimously approved the first reading of a 3% accommodations tax. This tax will specifically target hotel stays, and it appears that most local residents won’t need to worry about reaching into their pockets to pay for it.

A Strategic Decision

The new 3% accommodations tax is set to generate an estimated annual revenue of around $400,000, and it comes after the town’s previous tourism development fee ended. This fee was part of a 25-year agreement between Lexington and neighboring Richland County aimed at financing the Columbia Convention Center. The neighboring cities of Cayce and West Columbia have already adopted their own accommodations taxes, primarily to help boost tourism within their areas.

What’s Different About Lexington’s Tax?

While the other municipalities dedicate their accommodations taxes mainly to tourism initiatives, Lexington has some different plans in mind. Instead of focusing solely on increasing visitor numbers, the town aims to use the funds to bolster essential services and lighten the burden on local property taxes for residents.

Mayor Hazel Livingston enthusiastically shared her vision for the new revenue, 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. This way, we can possibly give a reduction in our millage.” She highlighted the potential to continue funding important road projects while keeping property taxes stable.

Understanding Tax Structures

It’s worth noting that this accommodations tax is not the same as the hospitality tax that Lexington currently imposes at 2%. While the hospitality tax applies to all purchases of prepared food and beverages in local restaurants, the new accommodations tax will focus solely on hotel stays. Thus, visitors to Lexington will be the primary contributors to this new revenue stream.

Concerns from the Hospitality Sector

As the council deliberated, Assistant Town Administrator Stuart Ford shared insights from discussions with local hotels. He indicated that six out of seven hotels operating in Lexington had voiced some concerns regarding the introduction of this tax. While they appreciate funding efforts for tourism, they are mindful about maintaining their competitive edge against hotels in nearby cities, like Columbia, which already have accommodations taxes in place.

Ford also mentioned that the hotel representatives expressed a preference for the ordinance to be administered in a manner that is straightforward and easy to comply with, emphasizing that the town is committed to making this process as smooth as possible for the hotels.

Next Steps

The accommodations tax is set for final approval next month, and once passed, the tax will come into effect as Lexington aims to partner with its visitors to enhance the quality of life for its longtime residents. With this initiative, the Town of Lexington seeks to channel funds that tourists contribute directly toward essential community services—perhaps paving the way for a brighter future.

As updates continue to develop, it seems that this thoughtful move by the Town Council could provide significant benefits for residents while ensuring that visitors help to contribute to the ongoing prosperity of the community.