Lexington is poised to pass a new tax that its citizens should actually like

Lexington County’s largest municipality is well on its way to enacting a new tax — one that local residents shouldn’t have to worry about paying.

The Lexington Town Council unanimously passed on first reading Tuesday to add a 3% accommodations tax within the municipality of nearly 25,000 that would be applied to every hotel stay within the town’s borders. It’s set for final approval next month.

The town is moving to enact its own accommodations tax with the 3% tourism development fee its hotels were locked into paying — part of a 25-year agreement between the counties of Richland and Lexington to fund the Columbia Convention Center — having come to an end.

Other entities in Lexington County, including the county government and the cities of Cayce and West Columbia, previously enacted their own accommodations taxes. In all three of these other cases, the funds are intended to go toward efforts to boost tourism within each government’s jurisdiction.

The town of Lexington, though, has other ideas about how to spend the roughly $400,000 in annual revenue its new tax would generate.

In discussions about the accommodations tax, the Town Council named a variety of potential uses in the realm of bolstering essential services and easing the local property tax burden on town residents, eager to add funding for these purposes generated by visitors.

“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,” Mayor Hazel Livingston said during an Aug. 19 council work session. “And we can maintain definitely not going up in our millage, and also continue to work on some road projects.”

An accommodations tax is different from its common counterpart in local government funding, a hospitality tax. That other tax, which Lexington already enforces at a rate of 2% and uses to pay for traffic projects among other needs, is applied to all purchases of prepared food and beverages, passed on to diners when they eat at local restaurants.

The parties that will feel the burden of Lexington’s new accommodations tax are the seven hotels operating within the town and the people who stay there moving forward. Assistant Town Administrator Stuart Ford told the Town Council at its Tuesday meeting that he had spoken with six of the hotels, and they expressed some concerns, including losing their competitive advantage against places like the city of Columbia, which have accommodations taxes.

“They thought it was important that you all know that they appreciate the money being spent to promote tourism in the town in whatever ways we can do. And we do that through current means that we have in place,” Ford said. “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.”