Lockport Union-Sun & Journal Online

Local News

August 1, 2013

NTCC suing Falls for owed bed tax money

Lockport Union-Sun & Journal — The Niagara Tourism and Convention Corporation this week filed a lawsuit against the City of Niagara Falls, seeking to make it turn over bed-tax receipts that are owed to the tourism promotion agency.

The suit, filed Tuesday in state Supreme Court, asks a judge to order Niagara Falls to surrender bed tax money to the agency that it collected in the months of June and July.

A 10-year agreement between the city and the agency, pledging monthly surrender of 80 percent of city bed tax receipts toward Niagara County tourism promotion, expired May 31. The city reportedly is holding back bed tax collected after May, pending a new agreement with the agency. The city council is divided on whether to continue supporting NTCC and the majority voted last month to table Mayor Paul Dyster’s proposed one-year extension of the old contract.

The extender mirrors one OK’d in mid-June by the Niagara County Legislature, whose members also appear divided, along party lines, on the question of whether NTCC is living up to contract terms including performance benchmarks and reporting to funders.

The tourism promotion agency is funded mostly from bed tax, a surcharge on all hotel/motel room rentals that is collected by the cities of Niagara Falls, Lockport and, elsewhere around Niagara, by the county.

The county’s 10-year agreement with NTCC expired June 1 and Republican lawmakers refused to approve a new 10-year pact. The one-year extender is portrayed as “buying time” for the county, the cities and NTCC to work through differences and secure a mutually satisfactory long-term agreement. Without the extender, NTCC would not be authorized to receive bed tax money.

State tax law authorizes municipalities to charge and collect bed tax only for the purpose of promoting tourism/economic development. The law also says that 75 percent of collections within a county are supposed to go the tourism promotion agency or agencies that are under contract with the county.

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