In 1983, the North Carolina legislature ratified a bill that created a lodging tax in Buncombe County. What ultimately became a four percent room tax is added to the seven percent sales tax that properties also must charge their customers. A total tax of 11 percent is charged to visitors for each night they stay in a hotel in Buncombe County.
There are few industries that voluntarily tax themselves, yet the hoteliers in Buncombe County were among the first in North Carolina to do so, knowing that when used for the promotion of tourism, these revenues could stimulate increased visitation to the community. For more than two years in the early 1980s, a task force of dedicated community leaders and members of the hospitality industry thoroughly researched the issue of occupancy taxes, addressing the benefits and pitfalls of taking this unprecedented step in Buncombe County and North Carolina.
Competing destinations in other states were already realizing the results of promotional campaigns executed with revenues derived from hotel-motel taxes enacted in neighboring states. Buncombe County hoteliers recognized the need to create a self-imposed tax that would ensure the region would not continue to see a drain of its visitors and the economic windfall they created each year.
The local delegation to the General Assembly along with the Institute of Government at Chapel Hill drafted the proposed legislation, creating a bill that was endorsed by the Buncombe County Board of Commissioners, Asheville City Council, the Western North Carolina Associated Communities (a voluntary organization of 11 counties), the Asheville Citizen, the Asheville Area Tourism Association, and the Asheville Area Chamber of Commerce. Local travel industry leaders serving on the boards of Travel Council of North Carolina, the NC Hotel and Motel Association and the NC Restaurant Association unanimously supported the legislation based on its ability to return all of the proceeds of the tax for tourism promotion.
Highlights of the Buncombe County Room Tax
- In 1983, hoteliers in Buncombe County decided to tax themselves and dedicate proceeds toward tourism marketing. The resulting legislation created a two percent room occupancy tax on accommodation rentals with five or more units and created the BCTDA.
- In 1985, an additional one percent was added and the tourism effort began to pay off for the community.
- In 2001, an additional one percent was added and dedicated to funding new tourism product that would generate new overnight hotel stays and create a significant economic impact for the community.
When the room tax began in 1983, annual spending by visitors to Buncombe County totaled $198 million, according to the North Carolina Division of Tourism, Film & Sports Development. Since then the direct, indirect and induced impact to the economy has grown to more than $2 billion.