Township to cash in on new state law.
By: Gwen McNamara
WEST WINDSOR The township has become first municipality in the area to pass an ordinance to cash in on a new state law imposing hotel and motel occupancy fees.
The new law, a provision of the state budget recently approved by the Legislature and signed by Gov. James E. McGreevey, empowers the state to impose a 7-percent tax on hotels, motels and bed and breakfasts beginning Aug. 1.
It enables municipalities to charge an additional 1-percent tax as well. In July 2004, the state tax will drop to 5 percent and the municipal allowance will increase to 3 percent.
On Monday, the Township Council unanimously approved an ordinance establishing the 1-percent hotel usage tax that includes a $1,250 fine for hotels that do not comply.
Most members of council voiced strong approval of the new ordinance.
"I support the hotel tax because we need the revenues and, in my experience as a business traveler, such a tax has never been a factor in the hotel I choose," said Councilman Charles Morgan.
He also believes that while the "convention community" might look at such expenses when determining a location for an event, the hotels and motels in the area will not lose out.
"I don’t think it’s a big factor for the West Windsor community," he said.
Councilwoman Alison Miller agreed. "We are a valuable and important destination and I think people want to come here," she said. "Just as they pay the tolls on bridges to get here, they’ll pay the hotel tax."
Only council President Kristin Appelget expressed reservations. She said she would rather the township not automatically increase the tax to 3 percent next year as stated in the ordinance.
"I think it should be revised next year so we can take a look back at the impact of the 1 percent, if there is one," she said.
According to Mayor Shing-Fu Hsueh, the tax, which is in addition to the state 6-percent sales tax, is expected to generate between $265,000 and $484,720 in the first year for the township and $795,000 annually after the local tax is increased to 3 percent.
He expects the revenues generated from the tax will be used to restore surplus and pay police and emergency service overtime. After that, it will be put to use reducing property taxes, he said.
West Windsor currently has 664 hotel rooms, including those at the Hyatt Regency Princeton, AmeriSuites, the Palmer Inn and the Extended Stay America.
An additional 260 rooms are on the way, the mayor added.
Township residents can expect to benefit from the new tax beginning around September, said Michael Herbert, township attorney.
Plainsboro is also considering a hotel tax ordinance.
The tax could generate between $500,000 and $700,000 annually once it is raised to 3 percent next year, said Mayor Peter Cantu.
The hotels in Plainsboro include the Courtyard by Marriott, the Westin at Princeton Forrestal Village and the Doral Forrestal.