KNOXVILLE, Tenn. — During their last meeting, members of Knoxville City Council voted to approve a proposal on first reading that would increase the city's hotel and motel tax rate by 1%.
The proposal would set that rate at 4% if it passes on second reading. Leaders said the new tax rate could result in around $2.2 million in Knoxville's coffers, based on revenue from last year, to be spent on maintaining infrastructure and to help cover tourism-related expenses.
Originally, the money could only be spent to pay down debt related to the construction of the Knoxville Civic Auditorium and Coliseum. As it ages, the building also needs repairs.
"This building is 64 years old and obviously, running a business out of a 64-year-old building — it needs to be kept up," said Michael Murray, owner of the Knoxville Ice Bears.
He said electrical work is just one expense on a long list of needed repairs to the hockey team's building. In December 2023, the hockey team also said it had to reschedule games due to mechanical issues with the building.
"All this talk about maintenance — we have these great facilities that we've all used and have great experiences with, but if we don't keep the infrastructure up, we aren't going to keep the revenue coming in," said Andrew Roberto, a member of Knoxville City Council.
According to the Tennessee Department of Revenue, tourists spent nearly $400 million on accommodations across Knox County in 2023. If the proposal passes on a second reading, the new 4% tax rate would be permanent and the city could have more funds to support tourism.
"We're creating a bucket of money that can be used for tourism-related infrastructure. So, to really enhance World's Fair Park, or the convention center, or the coliseum. I think that's a great idea," said Kim Bumpas, from Visit Knoxville.
Knoxville City Council is expected to decide whether to pass the proposal on a second reading on Nov. 26, during its next meeting.