Memphis checking if motels are paying taxes - FOX13 News, WHBQ FOX 13

Memphis checking if motels are paying taxes

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MEMPHIS, Tenn. (FOX13) -

No-tell motels are now on the city of Memphis' radar and it has noting to do with red light districts.

Could some establishments, which were recently dubbed public nuisances, turn into gold for Memphis city coffers? City leaders are now checking to see if motels are paying their property taxes.

The idea first came from a city council committee meeting some months ago, a discussion on raising the hotel-motel sales tax as then proposed by Councilman Edmund Ford, Jr., prompted members of the Memphis Hotel Association to ask a pertinent question: if we give our share why can't everybody who claims to be in our business give theirs?

They are the downtown multi-storied edifices that beckon out of town visitors with their luxurious multi-star rated amenities. But, for those looking for less swankier digs, Memphis also has its share of motel and hotel accommodations where the quality of service is measured not in gold stars, but in minutes and hours of alleged pleasure.

Some might call these "no-tell-motel" properties benefiting from the wages of sin. However, the cash-strapped city of Memphis is now more interested finding out  whether these little sugar shacks are paying their fair share in taxes.

"We had a number of major hotels in town saying, 'Hey, we're already paying our fair share. Part of your problem, city, is that you're not collecting from some of these smaller, less established hotels, and if you audit them we bet you could find some more revenues that way,'" said George Little, Memphis Chief Administrative Officer.

Eureka! What an idea! As little noted for years Memphis Police, the Shelby County District Attorney's Office and others have become familiar with the locations of such places. In May, seven motel proprietors were hauled into Shelby County Environmental Court, accused of being public nuisances by allegedly encouraging prostitution through the illegal renting of rooms at an hourly rate.

But, you can pretty much bet no one at the time asked them about whether or not they'd paid their property taxes or forked over sales tax. Now the city administration is doing more than just asking.

"We're about three, four months into what will be an 18-month cycle of auditing the hotels," Little said. "There are a number of small establishments that have high turnover on rooms and lot of cash sales. We've identified where they are not paying their fair share of the hotel/motel taxes."

In its continued effort to collect fines, fees and taxes owed the city, motels aren't the only ones being targeted. Little confirmed the auditors are also taking a look at beer wholesalers and small car dealerships as well. It's another indication of just how seriously Memphis city government is going after every conceivable revenue stream.

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