Understanding Dunwoody's Hotel-Motel Tax: A Guide for Residents

The Hotel-Motel Excise Tax (HMT) is a tax imposed on the cost of lodging at hotels and motels. In Georgia, local governments can impose this tax at rates ranging from 1% to 8%, depending on the authorization they operate under. The key point for Dunwoody residents: this tax is only collected when hotel rooms are occupied by guests, meaning it's funded entirely by visitors to our city, not by local taxpayers.

When visitors stay at Dunwoody hotels, they see several charges on their lodging receipt:

- Base Hotel Rate - The room cost set by the hotel

- Sales Tax - 8% (includes state, TSPLOST, LOST, SPLOST, and other local sales taxes)

- State Hotel-Motel Fee - $5 per room, per night (goes to the state)

- Local Hotel-Motel Excise Tax - 8% (paid to the city of Dunwoody)

Because Dunwoody operates under the 8% tax rate authorization (O.C.G.A. § 48-13-51(b)), Georgia law requires a specific breakdown of how these funds must be used:

Revenue Distribution Breakdown:

43.75% - (Tax rate = 3.5%) Must be used for Tourism, Conventions, and Trade Shows (TCT)

37.5% - (Tax rate = 3%) Non-restricted funds (can be used for any legal general fund purpose)

18.75% - (Tax rate = 1.5%) Must be used for Tourism Product Development (TPD), or if not used for TPD, must go toward TCT

Tourism, Conventions, and Trade Shows (TCT) - 43.75% Minimum

This portion must be spent on "promoting tourism, conventions, and trade shows," including:

- Advertising and marketing campaigns (brochures, billboards, social media, radio/TV commercials)
- Tourism promotion activities designed to attract visitors
- Convention and trade show attraction efforts
- Supporting convention facilities (in some cases)

What doesn't qualify: Direct funding of concerts, festivals, fireworks shows, street banners, snowflakes, etc. These are considered events themselves, not promotional activities to advertise tourism.

Tourism Product Development (TPD) - 18.75%
These funds can be used for creating or expanding physical attractions that:

- Are available and open to the public
- Improve destination appeal to visitors
- Support visitors' experiences
- Are used by visitors

Examples include parks, trails, museums, sports facilities, performing arts venues, visitor centers, and wayfinding signage.

Destination Marketing Organization (DMO)
The restricted tourism funds (TCT portion) must be spent through a Destination Marketing Organization—typically a 501(c)(6) nonprofit such as a chamber of commerce, convention and visitors bureau, or similar private organization. Discover Dunwoody is the DMO for Dunwoody and operates on a charter issued by the City of Dunwoody to utilize the TCT portion of the tax. Georgia law requires cities to have a DMO in place to utilize this portion of the tax, ensuring professional tourism marketing expertise and accountability.

Here's what makes the Hotel-Motel Tax particularly beneficial for Dunwoody residents:

1. Zero Cost to Residents - Only visitors staying in hotels pay this tax
2. Tourism Investment - The majority of funds (62.5%) must be invested in attracting more visitors and improving tourism infrastructure
3. Economic Multiplier Effect - More visitors means more spending at local restaurants, shops, and attractions
4. Enhanced Amenities - Tourism Product Development funds can create facilities that residents also enjoy
5. General Fund Support - The non-restricted portion (37.5%) can support general city services

Georgia law requires strict accountability for hotel tax funds:

- Annual reporting to the Department of Community Affairs
- Audit requirements with specific disclosure of fund usage
- Budget planning showing how funds will be spent
- Performance Review Board oversight for any complaints about fund usage

With 2,245 hotel rooms across 10 properties and an 8% hotel tax rate, Dunwoody has significant potential to generate visitor-funded revenue for tourism promotion and development. Every occupied room contributes to marketing our city and enhancing the visitor experience—creating a positive cycle that benefits both tourists and residents.

The Hotel-Motel Tax represents a smart approach to economic development: using visitor contributions to make Dunwoody an even more attractive destination, which in turn brings more visitors and economic activity to our community, all without any cost to local residents.

For more information about Dunwoody's Hotel-Motel Tax or to view annual reports, residents can contact the city's finance department or visit the Georgia Department of Community Affairs website for statewide hotel tax data and reporting.