City, VCVB must pay more tax money back

Published 12:00 am Friday, June 29, 2001

[06/29/01] For a second time, the State Tax Commission has said it has paid the Vicksburg Convention and Visitors Bureau and City of Vicksburg too much and that the money, $61,393 this time, must be paid back.

Separately, members of the VCVB board voted Thursday to buy the building on Washington Street where the tourism bureau has had its main office since 1995.

The agency, created 30 years ago to promote the city’s tourism industry, operates on about $784,000 a year generated from a 1 percent extra sales tax on nights spent in Vicksburg hotels and bed and breakfasts, on bar tabs and meals at larger restaurants.

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Vicksburg also imposes an extra 2 percent sales tax on rooms rented by the night to supplement Vicksburg Convention Center operations.

The Tax Commission receives the money and sends it back to the local treasuries. Because an unidentified motel or motels had been paying those taxes on rooms given away free, the state says a rebate is required. VCVB’s share will be $29,476 and the city’s share will be $31,917.

“First thing (today) or next week, I’m going to get the budget out and make sure everything is going to be all right ,” VCVB director Lenore Barkley said.

City Clerk Walter Osborne said the city had not been officially notified how much it would have to pay back, but that he was told the reason was improper collection of the tax on free rooms. Casinos often “comp” players rooms in their hotels. All four Vicksburg casinos offer such accommodations.

In a letter dated June 12 to Barkley, Larry Allen, branch director with the sales and use tax bureau, indicated that the Tax Commission would withhold $1,842 each month from refund checks to the VCVB and $1,995 from the city’s check’s for the next 16 months.

Larry Gawronski with Compass Facility Management, the Iowa-based management company that was hired in April to take over operation of the convention center, could not be reached.

The operating budget of the facility, completely separate from VCVB, is $870,000 including a $408,840 subsidy from the city. Income from the center and the 2 percent bed tax make up about half of that budget.

The VCVB had been ordered in October to pay back $70,000 the state accidentally sent. Barkley said the tourism bureau had been paying back $2,920 a month since November.

The agency was given 24 months to pay back the full amount.

Barkley said the loss of income from the state will not affect the purchase of the building at 1221 Washington St. The former First Federal Savings & Loan, later Unifirst, is being purchased for $280,000 from Trustmark National Bank.

The VCVB has been paying $24,000 a year in rent for the building.