KC to seek voter approval to tax nonprofit conventions

Unlike every other city in Missouri, Kansas City exempts nonprofit conventions from paying the city’s convention tax, costing the city millions of dollars each year.

But that would change under a proposal the City Council hopes to put before voters in April.

The Council’s Finance and Governance Committee on Wednesday endorsed the ballot measure removing such exemptions, and it goes the full council for a vote Jan. 10.

City officials didn’t know exactly when or why nonprofit groups were first exempted from the convention tax, but said the exemption goes back at least to 1989.

Several years ago, when the city’s Convention and Visitors Association began analyzing the impact, it realized the exemption from the 7.5 percent hotel bed tax was costing the city more than $3 million per year, said association President Rick Hughes.

The association knew the city could use that money, and also knew nonprofit hotel guests pay the tax in St. Louis and Branson, as well as in neighboring cities in Kansas.

“It’s leveling the playing field,” City Councilwoman Jan Marcason said of the ballot measure.

City officials got the Missouri legislature’s permission this year to eliminate the exemption, with the permission of city voters. The next election would be April 2.

The exemptions to be eliminated would affect religious, charitable and education groups as well as nonprofit civic, social and service organizations. The exemption still would apply to people involved in federal government business.

The change would generate about $350,000 annually for the Neighborhood Tourist Development Fund; about $1 million for the Convention and Visitors Association to promote tourism; and $2 million for maintenance and operations of city convention and entertainment facilities.