SB 953 proposes to modify and expand Cherokee County’s occupancy tax framework. The bill would authorize an additional, separate 3% occupancy tax on lodging and related accommodations, in addition to the existing 3% tax, and establish a dedicated Tourism Development Authority to administer and spend the net proceeds for travel, tourism, and convention promotion within Cherokee County.
Existing Tax Structure (unchanged base):
Cherokee County may levy a 3% room occupancy and tourism development tax on gross receipts from renting rooms or similar accommodations that are subject to state sales tax. This base tax does not apply to nonprofit charitable, educational, or religious organizations.
Authorization of an Additional Tax (Section 1, subsections (a) and (b)):
The bill allows Cherokee County to levy an additional occupancy tax of up to 3% of gross receipts, but only if the county also levies the base 3% occupancy tax. The additional tax would be governed by the same procedures and repeal processes as the base tax.
Administration (Sec. 3):
Taxes under this act would be levied, collected, administered, and repealed under G.S. 153A-155, with applicable penalties.
Distribution and Use of Revenue (Sec. 5):
On a quarterly basis, the county must remit net proceeds to the Cherokee County Tourism Development Authority (TDA). At least two-thirds of net proceeds must be used to promote travel and tourism in Cherokee County; the remaining share is for other tourism-related expenditures.
- Definition of Net Proceeds (for the purposes of distribution):
Net proceeds = Gross proceeds minus the county’s administration/collection costs, capped at 3% of the first $500,000 of gross receipts plus 1% of gross receipts above that threshold.
- Definitions related to Use:
- Promote travel and tourism includes advertising, marketing, materials, market research, and related administrative costs.
- Tourism-related expenditures include activities and capital expenditures aimed at increasing use of lodging, meeting, or convention facilities and attracting tourists or business travelers.
Cherokee County Tourism Development Authority (Sec. 6):
The bill requires the creation of a County TDA when the tax is adopted. The Authority is a seven-member public body with specified representation:
- One appointed by the County Board of Commissioners (BCC) from among its members.
- One nominated by the Town of Murphy (appointed by the BCC); active in tourism or tax collection.
- One nominated by the Town of Andrews (appointed by the BCC); active in tourism or tax collection.
- Three members affiliated with lodging businesses that collect the tax (appointed by the BCC).
- One member actively engaged in tourism promotion within Cherokee County (appointed by the BCC).
- Terms are three years, with no more than two consecutive full terms unless 12 months have elapsed after second term.
- The Authority’s duties include promoting travel, tourism, conventions, sponsoring events, and financing tourism-related capital projects.
- The County Finance Officer serves as ex officio finance officer.
- The Authority must report quarterly and annually to the BCC on receipts and disbursements.
Effective Date (Sec. 8) and Application (Sec. 2):
The act becomes effective on ratification, but Section 2 states it becomes effective October 1, 2026, and applies to occupancy tax proceeds remitted to the TDA on or after that date. Appointment and term changes are incremental, applying as current terms expire.
This bill would significantly expand Cherokee County’s capacity to fund tourism development through a dual-occupancy tax and a dedicated governance authority.
