By LESLIE COLLINS
Northeast News 
March 27, 2013 

Kansas City’s Question 2 hasn’t received much attention, but closing the dated loophole could mean millions in additional annual revenue for Kansas City.

In 1968, Kansas City enacted a convention and tourism tax, which is paid by guests staying in Kansas City hotels and motels. Non-profit organizations are exempt from this tax, which currently stands at 7.5 percent.

“Kansas City is one of the few places in the country that does not charge that rate universally,” City Council member Scott Wagner said. “We are one of the few that actually have this loophole. Because of that, we lose millions of dollars.”

In 2011 alone, the city lost out on $2 million, he said.

Between 2007 and 2011, Kansas City lost $9.9 million in revenue as a result of the exemption. Revenue from the tax funds the Kansas City Convention Center’s operating and capital expenditures; the Convention and Visitor’s Association, which promotes Kansas City and works to attract conventions; and the Neighborhood Tourism Development Fund (NTDF), which neighborhoods use to promote and fund events. The tax is the only source of funding for the NTDF.

“Some would suggest, ‘Hey, if you’re not charging that tax, maybe that’s a competitive advantage to Kansas City and we can get more of those types of organizations to come here,’” Wagner said. “The reality is most conventions are not concerned with the room rate or an incremental deal you might give to their members who are coming to the convention.”

Convention organizers are more concerned about the cost of transportation and renting facilities and ensuring there’s adequate space for convention goers, Wagner said.

Convention & Tourism Tax Breakdown: 

55.33 percent – operating and capital expenses at KC Convention Center

34.67 percent – Convention and Visitor’s Association

10 percent – Neighborhood Tourism Development Fund

Lost Revenue due to Exemption
(Years 2007-2011)

Convention Center: $5,501,786

Convention & Visitors Association: $3,447,441

NTDF: $994,359

•Kansas City residents are not impacted by this change in the ordinance. Hotel and motel room fees have been collected since at least 1954. In 1968, the convention and tourism tax was enacted. The current rate is 7.5 percent.