The Tellico Plains City Council is moving forward with plans to pass a lodging tax.

During their monthly meeting on Thursday night, the City Council approved the proposed draft of an ordinance to levy a privilege tax upon the “occupancy in any hotel or any plan in which rooms, short-term rental units, bed and breakfasts, lodging or accommodations are furnished to transients for a consideration in Tellico Plains.”

The ordinance draft, which lists a 2.25% occupancy rate, passed with a unanimous vote from the board members present—Alderman Robert Hamilton, Alderwomen Jo Cagle and Marilyn Parker, and Mayor Patrick Hawkins. Alderwoman Sherri Raby and City Recorder David Bookout were both absent.

The ordinance will have to be passed on two readings during public hearings before it is official.

Because Tellico Plains does not have a hotel/motel currently, the privilege tax will also apply to any lodging options in the town, including bed and breakfasts, cabin rentals, short-term rentals and Airbnbs.

“It would be good to get it passed before we actually get a hotel so it doesn’t look like we’re gouging them,” said Cagle, who made the motion to proceed with the ordinance draft. Her motion was seconded by Parker.

Proceeds received from the tax will be available for the town’s general fund, restricted for economic and community development and tourism use.

“We are looking at ways to generate revenue without asking our property tax payers to pay more,” Cagle told The Advocate & Democrat. “A consumer-based tax, such as this, would not affect our local citizens as much.”

Also at the meeting:

  • In a short Beer Board meeting prior to the regular meeting, the City Council approved a beer license for Tellicafe.
  • The board approved Home Energy Concepts Corporation to do inspection services for the HOME grant.
  • Jim DeBernardi’s request for a sewer tap variance was approved for his rental cabins. According to Hawkins, DeBernardi had paid to install a 6-inch water line extension at a cost of approximately $60,000, had purchased one sewer tap and would be purchasing another. The variance will waive the cost of a third sewer tap.
  • The City Council also approved the purchase of a mower and backhoe for the Water Department. The Bobcat backhoe will be on a 24-month lease at a cost of $1,072 per month for two years. The lease includes all parts and labor while under warranty. Hawkins said the town will have the option to purchase the piece of equipment at the end of the 24-month lease for $24,021.
  • The board agreed to do a 6-inch water line extension from Highway 68 to New Providence Baptist Church’s expansion property. Steven Patton, representing the church, said the water line was needed before construction could begin on the property.

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