By Jessie Burchette
jburchette@salisburypost.com
Rowan County is preparing to take legal action against a Salisbury hotel which, may owe the county $15,000 or more.
The Travelodge at 1328 S. Jake Alexander Blvd., formerly Ramada Inn, has collected the county’s 3 percent occupancy tax, but hasn’t turned it over to the county. The owner of the hotel says he hopes to work out an agreement on the taxes.
The 3 percent tax is added to hotel room costs and paid by visitors stopping in the county.
The occupancy tax is the main revenue source for the Rowan County Tourism Development Authority and its Convention and Visitors Bureau.
Tourism Development Authority officials discussed the situation with County Attorney Jay Dees during a lunch meeting Wednesday.
Dees said he plans to serve hotel owner Ken Chung with a notice in the next few days. If the taxes are not turned over or some deal worked out for payment, Dees said he will proceed with legal action.
Dees suggested taking a reduced amount in a lump sum might be the best deal. If the issue goes to civil court, it could take months or even years to settle the case.
Tourism board members said they want the full amount of taxes the Travelodge has collected.
Executive Director James Meacham said it would be tough to look other hotel owners in the eyes if the Tourism Authority take takes less than 100 percent of what is owed. Meacham said to take less would be rewarding the hotel owner for failing to comply with state laws.
Board member and Salisbury City Councilman Mark Lewis said the taxes collected belong to the county and asked if there is some criminal provision of the law that can pursued.
Dees said he has focused on the civil side, but will examine the General Statutes to see if there is a possible criminal penalty.
Meacham, Lewis and others compared the occupancy tax to payroll taxes, pointing out if an employer doesn’t turn those taxes over to the state, they face criminal penalties.
Tourism officials said Chung has owned the hotel for a decade. When it was Ramada Inn, the taxes were turned over monthly to the county.
When the hotel changed franchises to Travelodge in mid-2007, the flow of taxes stopped.
As Travelodge, the hotel has turned over two months of taxes since July 2007, county officials say.
Chung said late Wednesday that he is working on the tax issue. “I am doing my best. I’m having a tough time. We should be able to work it out.”
Chung went on to say that he is working to revive the property. “We have good things going on,” he said, adding that his hotel hasn’t received any help from the community.
In addition to the taxes due, Dees said the hotel faces interest and penalties. He did not specify the exact amount owed. The county’s finance department is preparing a final estimate in preparation for the legal action.
Meacham said most hotel operators keep the tax money in a separate account and turn it over at the end of the month.
Last year, a total of $318,000 in occupancy taxes were collected in Rowan County, most in Salisbury.