Closing a costly loophole in Kansas City’s hotel tax is a high priority on the ballot early next month.
The Star recommends a yes vote on Question 2 on April 2. Essentially, it would require most nonprofit groups to pay the 7.5 percent convention and tourism hotel tax that they now aren’t charged.
The city would gain an estimated $2 million a year. The funds would:
• Better maintain Bartle Hall, with an extra $1.1 million annually.
• Provide $700,000 more each year to the Kansas City Convention and Visitors Association to market the city for future gatherings.
• Add $200,000 a year to the Neighborhood Tourist Development Fund, which pays for dozens of local programs.
Thanks to decades-old language in its ordinances, Kansas City is the only city in Missouri that exempts nonprofits from paying the hotel tax. St. Louis, Branson and other cities that woo conventions in the state charge a local hotel tax to nonprofits. So do all Kansas cities.
Convention experts aren’t worried that eliminating this special exemption would drive away business.
“We haven’t seen any advantage” for Kansas City because of the tax loophole in the past, said Rick Hughes, president and CEO of the Convention and Visitors Association.
He and others point out the city will still compete aggressively to get conventions sponsored by nonprofit groups.
“Our room rates are very competitive,” said City Council member Jan Marcason.
That’s generally true, although the high total sales tax rate of around 18 percent for downtown hotel rooms adds to that tab.
The new charge for nonprofits, if allowed by voters, would be paid mostly by people who live outside the city and come here as visitors or to attend conventions. They use the city’s streets, are protected by the city’s public safety agencies and benefit from the huge investment taxpayers have made in convention facilities, including Bartle Hall.
On April 2, voters should give City Hall the ability to collect a motel tax from nonprofit organizations.
Then the city must use the funds effectively to improve convention facilities and finance additional neighborhood events in the future.