TAX NEWS - 2010

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2 percent hotel tax hike measure fires up debate

A ballot measure that would increase the hotel tax by 2 percent is sparking a debate with hotel industry and business advocates saying it would be devastating as supporters say it's a modest tax hike that the hotel industry can afford.

On the same day supporters of the measure submitted what appears to be more than enough signatures to place it on the Nov. 2 ballot, the San Francisco Chamber of Commerce and the San Francisco Hotel Council fired off press releases condemning the tax. About 15,000 signatures were submitted to place the measure on the ballot. It requires 7,168 signatures.

The measure has the support of such people like Board of Supervisors President David Chiu, Tim Paulson, executive director of the SF Labor Council, and head of Democratic County Central Committee Aaron Peskin. It comes as The City is facing large budget deficit years and services have been cut to the bone.

In a statement, president of the San Francisco Chamber of Commerce Steve Falk said the measure is "really the 'Hotel Job-Killing Initiative.'" "This misguided effort will discourage travel to San Francisco, hurt our city's largest industry and eliminate many of the union jobs the labor council seeks to protect," he said.

Peskin told the Examiner: "The reality is that the occupancy rate in San Francisco is quite strong. And to the extent that the corporate hotel industry wants to keep their occupancy rate high they have to adjust their room rate accordingly."

The City's hotel tax rate is 14 percent. Hotels voted two years ago to add an additional 1.5 percent tax assessment to fund improvements to The City's premiere convention area, Moscone Center. The measure, if approved by voters, would increase the hotel tax by 2 percent.

During a Tuesday rally on the steps of City Hall, Peskin said: "It helps in a very small way to balance the budget and provide the services that San Franciscans deserve and are accustomed to. And most importantly this was put on the ballot by the people and the people get to decide. So let's take the politics of City Hall out of it."

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