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Taxing Hotel Movies

To generate film industry incentives, state taxes hotel-room movies.

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When all else fails, tax the hoteliers. A law that went into effect July 1 does just that — adding a 10-percent tax on hotel-room movie purchases. Half of the revenue generated goes to the state's general fund; half goes to the Governor's Motion Picture Opportunity Fund.

That motion-picture money is used by the Virginia Film Office to keep the state competitive when vying for film and commercial productions. The new tax will be in addition to the $200,000 that the state contributed this year to the fund. Initially the movie fund received $1 million when it was created in 1998.

Rita D. McClenny, head of the film office, says that for every dollar spent through the fund, the commonwealth sees an average return of $14.30.

The Virginia Hospitality and Travel Association, which lobbies on behalf of Virginia's hotels and restaurants, supported the tax, maintaining it will generate an additional $1 million annually.

This isn't the first time regional hotel operators have been asked to ante up, and not all owners are on board. In the mid-1990s, regional hoteliers were slapped with an 8-percent lodging tax to pay for the $170 million Greater Richmond Convention Center.

 P.C. Amin, the owner of 32 hotels in Virginia and Maryland, agrees with the 5-percent tax going to the movie fund, but disagrees with the 5-percent tax going to the state's pockets.

Already, “the lodging tax is about 14 percent … that's pretty high,” Amin says. “A lot of that has no benefit to the business. They are collecting a lot of money, and all that money [from the lodging tax] goes to the general fund.”

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