KOKOMO - Local and state officials are considering an increase of the Howard County innkeeper’s tax, which could help pay for a new convention center.
State Rep. Mike Karickhoff, R-Kokomo, is asking local officials to express agreement on the specifics of a proposed increase that could raise the tax from 5 to no more than 8 percent and generate a significant boost in revenue for the Kokomo/Howard County Convention and Visitors Bureau.
In an interview, Karickhoff referenced the extra funding and how it could be spent.
“There’s been discussion about a convention center,” he said. “There’s been discussion about trying to assist some of the attractions, and I was approached about a bill that would allow them to have special enabling legislation.”
Last week, the Howard County Council consented to, and expressed favorability for, the filing of a preliminary, redlined bill that, if approved by the General Assembly, would allow for the tax increase.
As part of the council’s motion, which was approved by a unanimous vote, members requested that the bill include a passage that allows the council to approve a specific capital improvement project from the CVB, like a convention center, instead of being considered as a budgetary line item.
Karickhoff said he was asked to carry enabling legislation that would allow the county to raise the innkeeper’s tax. The county cannot adopt the tax increase unless the Indiana General Assembly first passes a special Howard County innkeeper’s tax statute.
Karickhoff did say, however, that he won’t file the necessary bill until all parties agree on specifics. The deadline for filing House bills is Jan. 10, according to the General Assembly’s online calendar.
Overall, Karickhoff noted that he wants to see a consensus from the Howard County Council, county commissioners, Kokomo Common Council, Kokomo Mayor Greg Goodnight and the CVB.
“I kind of forced the issue a little bit to make sure everybody was in agreement that this was their desire,” he said, noting that he expects all groups to be in support of the tax increase.
Last year, the tax brought in $585,863, according to Howard County Treasurer Wes Reed, who is the collection agency for the CVB. Through the first 10 months of this year, the tax brought in $565,893. Reed said collections for the months of November and December should amount to another $80,000 to $100,000.
Therefore, an increase of the innkeeper’s tax from 5 to 8 percent could bring in another $350,000 to $400,000 annually.
Reed said the increase could potentially be attributed to more people staying in Kokomo and referenced Kokomo Municipal Stadium as a possible source of additional tourism for the city.
Effectively, the innkeeper’s tax is charged to people who book rooms in Howard County hotels, motels, bed and breakfast spots and other lodgings. The tax is collected, similar to sales tax, when a customer pays for their stay at a specific location.
The tax is approved for collection by state legislators and is specific for each county.
Howard County’s innkeeper’s tax began at 4 percent before being increased to 5 percent to help pay for the Kokomo Event Center.
As a tourism tax, the amount collected through the innkeeper’s tax fluctuates, in part, with the economy and is dependent on how much people can pay to stay in hotels, motels and other lodging rooms.