Opinion – Visitors Pay, Our Community Benefits

BY Andrew Levy, Esq.

The residents of Panama City have a great opportunity to finally VOTE YES on September 30th for the creation of a Panama City Tourist Development Tax. It is also known as ‘bed tax .’ An additional 5% is charged to people who rent motel or hotel rooms, apartment units, condos, or houses for less than six months. The amount is usually only incurred by travelers and visitors. This “bed tax” has been successfully implemented within the city limits of Panama City Beach since 1986 and now generates $15 million in income annually. The city of Panama City Beach uses the proceeds effectively to support target market advertising, as well as events that drive visitations, such as the Pepsi Gulf Coast Jam, New Year’s Eve Beach Ball Drop, Seabreeze Jazz Festival, Pirates of the High Seas Fest, PCB Mardi Gras and Music Festival and a host of other events. These events and target market advertising generate over $1 billion in tourism revenue each year. An estimated $1 .4 million would be generated by visitors to Panama City from the approximately 1,500 hotel rooms located here. These funds would be used to invest in proactive programming and projects that can benefit the entire community which, in turn, would help build and promote new opportunities to invite and attract more patrons and visitors to Panama City’s restaurants, venues, attractions, and stores.

The new “bed tax” will only apply to “beds” within the city limits of Panama City and will be overseen and controlled by the Panama City Commission . The “bed tax” revenue can only be used for specific purposes:

• to enhance and promote the arts, culture and historical identity of Panama City with a primary purpose of generating overnight visitation to Panama City;
• to further promote sports marketing and visitor center activities that drive visitation to Panama City; and
• to develop and support special events and festivals that generate overnight visitation to Panama City.

The Boards of Directors of the Bay County Chamber of Commerce, Panama City Beach Chamber of Commerce, Bay Economic Development Alliance, Panama City Downtown Improvement Board, Bay County Association of Realtors, Bay Arts Alliance and the Bay County Tourist Development Council have unanimously voted to support this plan, as has the Panama City Commission. In approving the referendum, the Bay County Board of Commissioners also overwhelmingly voted in favor of it.

The initial plan for the “bed tax” that was officially adopted by the Panama City and Bay County Commissioners was based on the plan developed by the Panama City Bed Tax Advisory Committee. The Advisory Committee is a group of local citizens who were chosen to represent interested parties. It is comprised of George Husum, the owner of g. Foley’s restaurant; Jennifer Jones, Executive Director of the Bay Arts Alliance; Harry Patel, an owner of several area hotels; Bob Zales, charter boat captain; Jason Oakes, one of the owners of the Buccaneer Beach Motel; Clint Mayo, Panama City resident; and myself. The committee developed a plan which encourages the City to undertake some initial surveys of current and potential visitor market segments, conduct an inventory of current community assets, and retain a destination marketing professional to provide guidance and support so that funds are spent in a targeted manner for the best return on our investment.

Panama City has been leaving a lot of money on the table, so to speak, by not having a “bed tax .” As you might have guessed from your own travels, “bed taxes,” similar to what we are talking about here, are extremely common. In fact, forty-seven states have, or otherwise permit, such taxes to be imposed on visitors. Even the 5% rate that will be used here in Panama City (as it is in Panama City Beach) is reasonable compared to some other places. In a recent study, the average gross tax on a hotel room nationwide was over 12%.

 

[author image=”https://www.panamacityliving.com/media/2014/09/Andrew-Headshot.jpg” ]Andrew Levy served as Chairman of the Panama City Bed Tax Advisory Committee. He is currently Chairman-Elect of the Bay County Chamber of Commerce and is a partner with Harrison Sale McCloy, serving as the head of the Firm’s Business and Commercial Law Group. [/author]