Town’s lone hotel opposes new state occupancy tax

By tara petersen
Staff Writer

By tara petersen
Staff Writer

MONROE — The township may soon take advantage of a new state-mandated tax on hotels and motels.

The Township Council voted unanimously Monday night to introduce an ordinance that will allow the municipality to collect what at first will be a 1-percent occupancy tax from hotels in town — of which there is currently just one.

The tax is the result of a state law recently signed by Gov. James E. McGreevey, which places an 8-percent occupancy tax on hotels. The new tax is in addition to a 6-percent sales tax already collected from the hotel industry.

If passed, the ordinance allows the township to take a 1-percent portion of the occupancy tax, leaving 7 percent for the state. According to the state, the municipalities’ share of the tax will increase to 3 percent by 2004, while the state receives 5 percent.

If the council does not adopt the ordinance, the state would still collect its 8 percent, leaving the township with no addi­tional revenue. Since hotels are required to pay the 8 percent, regardless of actions from the municipalities, the decision by the local governing does not affect the hotels.

The only hotel in Monroe Township is the Holiday Inn of Jamesburg, which is lo­cated on Forsgate Drive.

The hotel’s general manager, Tim Turner, called the tax "grossly unfair to an industry that has been suffering in a down economy for the last two years.

"Whenever a state has a money prob­lem, they attack the tourism industry first. They think it’s an easy fix because it af­fects people outside of the state," Turner said.

Hotel rates typically range from $99 to $139 per night, he said.

Turner said the tax may not reduce the number of people coming to stay at the ho­tel, but "may keep them from potentially using my restaurant, ordering a movie or staying an extra night. That $8 (or more) to a room fee every night really adds up."

According to Monroe Township Busi­ness Administrator Wayne Hamilton, the township would gain about $38,000 this year, and $114,000 in subsequent years, from the hotel.

Council President Irwin Nalitt said the council felt obligated to introduce the ordi­nance.

"It would have been fiscally irrespon­sible not to impose the tax. From what I see, all the towns around us are imposing the tax," he said.

East Brunswick, South Brunswick, North Brunswick and New Brunswick are among the surrounding communities that have adopted similar ordinances.

Some hotel employees in Middlesex County have noted that, while they do not support the tax, they took some solace in the fact that the government plans to allo­cate $10 million of the total revenue gener­ated from the tax into promoting tourism in the state.

State Assemblyman John McKeon (D-Essex), who co-sponsored the bill, has said that the tax was a way to relieve property taxes with the least impact on New Jersey residents, since hotels tend to attract people from outside the state.

He said that if every New Jersey munic­ipality were to enact the ordinances, the municipalities could give their residents a total of $16 million in property tax relief.