Board hears legal options for 1% lodging tax increase; members favor 3%/3% split between county and tourism fund
March 31, 2026 | Madison County, Virginia
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Madison County supervisors discussed a staff proposal to increase the transient occupancy (lodging) tax by 1 percentage point (from 5% to 6%) and how any additional revenue would be split between the county’s general coffers and the tourism/trust fund.
Staff cited Virginia Code §58.1‑3819 and local code provisions, explaining that the county’s current 5% TOT assesses 2% to the county while the remainder is directed to a tourism fund. Staff said the code can be amended to set a 6% total rate and to specify how the additional 1% would be remitted; under state law any amount over the base can be designated for broader county use if the ordinance is written to allow it.
Why it matters: staff estimated the incremental revenue at roughly $50,000 per 1% increase and said the board will need to amend local code and hold a public hearing to finalize a permanent change. The board also discussed outreach to the tourism advisory committee and stakeholders before taking final action.
Public and board concerns: at least one meeting participant, who identified as a property owner, and several board members said short‑term rental bookings have fallen (one speaker estimated a roughly 20% decline) and warned that raising the fee could further burden small lodging operators. A supervisor who recused on the topic confirmed they could still address the board from the podium and urged staff to ensure fairness for small businesses.
Board direction: staff noted a prior, informal poll at the last meeting was 4–1 in favor of the 1% increase. During discussion several supervisors said they favored directing staff to draft an ordinance and public‑hearing materials that would set the overall rate at 6% with the incremental revenue split evenly (3% to county general purposes, 3% to the tourism/trust fund) and to clarify remittance language before advertising a public hearing.
What’s next: staff will prepare detailed ordinance language and revenue estimates for public hearing, clarify remittance mechanics and whether to consult the tourism advisory committee, and return to the board for formal action.
Staff cited Virginia Code §58.1‑3819 and local code provisions, explaining that the county’s current 5% TOT assesses 2% to the county while the remainder is directed to a tourism fund. Staff said the code can be amended to set a 6% total rate and to specify how the additional 1% would be remitted; under state law any amount over the base can be designated for broader county use if the ordinance is written to allow it.
Why it matters: staff estimated the incremental revenue at roughly $50,000 per 1% increase and said the board will need to amend local code and hold a public hearing to finalize a permanent change. The board also discussed outreach to the tourism advisory committee and stakeholders before taking final action.
Public and board concerns: at least one meeting participant, who identified as a property owner, and several board members said short‑term rental bookings have fallen (one speaker estimated a roughly 20% decline) and warned that raising the fee could further burden small lodging operators. A supervisor who recused on the topic confirmed they could still address the board from the podium and urged staff to ensure fairness for small businesses.
Board direction: staff noted a prior, informal poll at the last meeting was 4–1 in favor of the 1% increase. During discussion several supervisors said they favored directing staff to draft an ordinance and public‑hearing materials that would set the overall rate at 6% with the incremental revenue split evenly (3% to county general purposes, 3% to the tourism/trust fund) and to clarify remittance language before advertising a public hearing.
What’s next: staff will prepare detailed ordinance language and revenue estimates for public hearing, clarify remittance mechanics and whether to consult the tourism advisory committee, and return to the board for formal action.
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