Proposed Dover lodging tax takes big step forward

DOVER — Dover Councilman Tanner Polce called it a “call to action and a full-court press.”

That’s after he learned the General Assembly had authorized legislation to allow Kent Levy Court to establish a tax on hotels and similar establishments — and to then direct that revenue to the DE Turf sports complex.

That bill, which passed on June 30, enables Kent County to place a tax of up to 3 percent on hotels, motels and tourist homes — including those in the city of Dover — with the proceeds designated for the Frederica-area sports complex.

That led Councilman Polce and Dover City Council President Bill Hare to co-sponsor a separate Dover City Ordinance #2019-16 Amending Chapter 102 — Taxation of the Dover Code by inserting a new article VII — Local lodging tax.

Mr. Polce and Mr. Hare’s proposed ordinance that will charge taxes of 3 percent on guests staying in hotels, motels and tourist homes in Dover, was carried by the Council Committee of the Whole’s Legislative, Finance, and Administration Committee by a unanimous 9-0 vote at its meeting on Tuesday night at City Hall.

The proposed ordinance will still have to pass a vote by the full city council before it can be adopted.

“This was truly in reaction to a legislative measure that was also introduced by Sen. Paradee that pretty much says (Kent) County can go out and tax up to 3 percent and the monies that are generated by the city of Dover’s motels and hotels would then be diverted to DE Turf (a sports recreation complex south of Frederica),” Councilman Polce said of General Assembly legislation. “Explicit language in a piece of legislation … ‘diverted to DE Turf.’

“For posterity’s sake, it’s important to understand what that means. So, monies that are generated in this city, individuals coming into this city, riding on our roads, using critical services if need be, are then using our infrastructure, and the money is diverted to Delaware Turf.”

He then added, “It was a call to action, and it was a full-court press. I am just very thankful that my colleagues, and frankly, my good friends in the General Assembly thought it was as well. This gives us an ability to be on equal footing, on a level playing field, with everyone else.”

The proposed separate Dover lodging tax ordinance states:

“A local lodging tax is hereby levied of 3% of the cost of the rent, in addition to the amount imposed by the State and the County, for any room or rooms in a hotel, motel or tourist home, as defined in 30 Del. C. §6101, within the boundaries of the City of Dover

“The local lodging tax, pursuant to this ordinance, is the responsibility of the occupant of the room and shall be collected at the time the rental is paid. Operators of the hotel, motel or tourist home are responsible for the collection of the local lodging tax and the remittance of the taxes to the City of Dover within 20 days after the end of each calendar month, in accordance with procedures established by the City Manager and using forms designated by the City Finance Department. The tax imposed shall be shown on the billing to the occupant as a separate and distinct item.

“No local lodging tax pursuant to this ordinance shall be collected for reservations or contracts for lodging executed or completed before *(date of adoption).”

City Manager Donna Mitchell said studies took place regarding a lodging tax a couple of years ago and estimated that a 3 percent tax could take in approximately $600,000 to $800,000 in potential revenue for the city of Dover.

“It’s a long time in coming,” said City Councilman Fred Neil of the Dover proposal. “I had talked about it when I was first elected in 2015 and there was supposed to be some resistance from basically the tourist community, accommodations, restaurants, tourism and the like.

“The fact is, whatever we use for this money, whether it’s strictly used for infrastructure, there’s no reason why we shouldn’t have visitors to help us with this and it’s long overdue.”

Council President Hare and Councilman Polce both agreed that if the ordinance passes, that more meetings will need to be held in order to determine what to do with the additional revenue, whether it be for infrastructure, parks, building improvements and such.

Added to the separate 3 percent Kent County lodging tax that is earmarked to go to DE Turf, guests at Dover hotels and motels could expect as much as $12 to be added to their bills for each nightly stay.

“I think also that you should be aware that we’re not the first city in the state that is addressing this,” Council President Hare said.

“We lagged behind a lot of other cities. I know Milford has done it, Wilmington has done it, and I think this year alone there have been four cities that have implemented this in the state.

“We’re not the pioneers, we’re not the leaders in doing this, we’re just finally catching up.”

Delaware State News staff writer Mike Finney can be reached at mfinney@newszap.com.

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