Hotel room tax likely to be increased
By Adam Hocking
MARSHFIELD — Though a final ordinance will have to be passed at a future common council meeting, the Marshfield Common Council approved as part of its consent agenda an increase in the hotel room tax rate from 6 percent to 8 percent at Tuesday’s meeting after the Finance, Budget, and Personnel Committee approved the increase on May 19. The change would take effect on Jan. 1, 2016.
Room tax is the primary funding source for Marshfield’s Convention and Visitors Bureau (CVB), and CVB Director Matt McLean said that many surrounding communities already have the 8 percent room tax rate.
McLean said that the room tax had not been increased since 1999. When the CVB was initially founded, the room tax rate was 4 percent, and the money collected was split evenly between the city and the CVB. As the room tax rates have increased from 4 to now potentially 8 percent, the CVB claims 70 percent of the revenue generated from that increase.
“The way that the tax is, is the first 4 percent is split 50/50, and then the second 2 (percent) is 70/30, and then the (next) 2 is 70/30, so basically after all the math it would come to be about 60 percent tourism spending, and then 40 percent would go to the city,” McLean said.
McLean said the additional revenue generated by the room tax increase could open new opportunities for the CVB.
“We’re definitely very excited about opportunities with sports as far as helping encourage more tournaments, help work with city parks and rec to improve and maybe expand facilities,” McLean said. He added that the CVB would also look to use the additional revenue to promote the new grizzly bear pen, which broke ground Wednesday. The CVB will also work to increase promotion of Marshfield as a place for out of town visitors to have conferences or meetings.
McLean said the room tax increase would raise the rate of the average hotel room $1.67 per night.
The city is required to use its portion of room tax revenue on projects or initiatives that are designed to augment tourism and bring people to Marshfield.