ELGIN – In April, Elgin officials will ask voters to approve a lodging tax that could provide an incentive for a major developer to build a hotel in town.
In a special meeting, the Elgin City Council voted 3-0 on Jan. 23 to approve a 7% tax on the r oom rental rates for hotels and motels. The council also called for a special election on the proposition, which is set for April 1.
Elgin needs the ability to off er an incentive to compete with other cities trying to recruit a hotel developer, said Mayor JJ Francais.
“There’s not a hotel being built in rural Oklahoma – or actually, probably, in most cities acr oss America – without some sort of incentive,” he said. “If we don’t provide the incentive, the next city will.” Additional options to incentivize a hotel Francais said the city has se veral possible options for offering incentives for hotel developers, including a sales tax incen tive.
“We can't rebate the streets and parks tax without it coming out of general revenue, which I would rather not do,” Francais said. “That is designated money, so you can’t tinker with it.”
However, he said, the city co uld offer as an incentive a portion of the sales tax that a b uilder pays towards building supplies. City officials are considering other possible incentives for hotel developers, such as reducing their water rates or waiving building permit fees, but have not committed to what an incentive program would look like.
Elgin residents have told Francais since he took office in 2021 that the town needs a ho tel, he said in a Jan. 29 email to a Southwest Ledger reporter.
“Whether it be for graduations at Fort Sill or family coming to visit, residents have made it clear that a hotel should be a priority f or the city,” Francais said. Lodging tax If voters approve the proposition, the owners of hotels and motels would charge a 7% lodging tax in addition to other city — and state-imposed sales taxes. The Oklahoma Tax Commission would serve as the collecting agent for the tax and return the proceeds to the city.
Half of the proceeds would go into the city’s general fund for infrastructure upgrades, and the remaining 50% would go to the Elgin Economic Development Authority. Part of the EEDA’s share would be used to provide the developer’s incentive.
Some cities use their lod ging tax revenue to pay for street and sewer upgrades, while other cities and counties use that money to help support their county hospital, Francais said.
“It can go to just about any municipal function that you can imagine,” he said.
Francais added that out-of-town visitors would pay the tax, but people who live in Elgin would not have to pay it if they can show proof of residency.
“There’s going to have to be some sort of almost like a ‘Show your ID’ campaign,” he said. “And that is when you show your ID, you don’t pay this tax.”
Councilman Travis Bennett said officials should make sure that Elgin residents understand that they would not have to pay the tax.
“I think we need to make that very apparent on the outlets – social media outlets,” he said.