T or C Lodgers Tax Receipts Growing Steadily

Truth or Consequences’ Lodgers Tax funding has increased an average of 10% per year since 2016 and is on track to have a record year in 2024. Lodgers Tax is a 5% tax collected by lodging facilities from guests who stay 30 nights or less.

Data provided by the City suggest that annual short-term lodging subject to Lodgers Tax has increased around 75% over the last eight years. In 2016, $267,105 was collected, rising to $469,370 in 2023. This reflects an 2023 visitor spend of over $9 million on short-term lodging within city limits alone.

The twelve month average in Lodgers Tax monthly receipts has increased from $22,259 in December 2016 to $41,533 in September 2024.

Through September 30th, receipts for 2024 total $379,387, and with three months remaining, the City is likely to again exceed the previous years’ totals. The tax is paid to the City in the month after the tax is collected from guests, so September receipts reflect August bookings.

With seasonal variation and a notable pandemic-related drop in 2020 and 2021, the trendline is headed up:

Lodgers Tax is collected monthly from all commercial lodging facilities within city limits. One reason for the increased receipts is that owners of Air B&B rentals began paying Lodgers Tax in 2021.

Spending of Lodgers Tax is overseen by a citizen advisory board and approved by City Commission. The Lodgers Tax Advisory Board meets bi-monthly and non-profit organizations that would like to apply for marketing funds may obtain an application form & guidelines from the City Clerk’s office. Typical expenditures include reimbursements to non-profit organizations that produce events or advertising campaigns designed to increase tourism visits.

The allowed uses of Lodgers Tax are defined in the City’s municipal code Section 7-12:

1. collecting and otherwise administering the tax, including the performance of audits required by the Lodgers’ Tax Act pursuant to guidelines issued by the Department of Finance and Administration;
2. establishing, operating, purchasing, constructing, otherwise acquiring, reconstructing, extending, improving, equipping, furnishing or acquiring real property or any interest in real property for the site or grounds for tourist-related facilities, attractions or transportation systems of the Municipality, the county in which the Municipality is located or the county;
3. the principal of and interest on any prior redemption premiums due in connection with and any other charges pertaining to revenue bonds authorized by section 3-38-23 or 3-38-24 NMSA 1978;
4. advertising, publicizing and promoting tourist-related attractions, facilities and events of the Municipality or county and tourist facilities or attractions within the area;
5. providing police and fire protection and sanitation service for tourist-related events, facilities and attractions located in the Municipality; or
6. any combination of the foregoing purposes or transactions stated in this section, but for no other municipal purpose.