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The Drury Inn Sues the City of St. Peters, Missouri Over Additional Tax
 Proposal Which Would Take the Occupancy Tax to 17.5%

By Shane Anthony, St. Louis Post-DispatchMcClatchy-Tribune Regional News

September 10, 2010 --ST. CHARLES COUNTY -- A hotel company has sued in circuit court to try to keep St. Peters from placing a proposed 5 percent hotel tax on the Nov. 2 ballot.

Drury Capital Corporation, which owns the Drury Inn at Mid Rivers Mall Drive and Interstate 70, is asking the court to say the city has no authority to ask voters for the tax because a countywide rate of 5 percent already applies to hotel guests.

Tim Drury, the company's president, said a previous 5 percent tax imposed by St. Peters cost the hotel business. Baseball teams coming into town for tournaments sought lodging elsewhere after learning of the tax, he said.

"Most individuals or corporations don't mind paying their fair share of taxes," he said. "It's when the taxes become excessive and it starts hurting business that it becomes a big problem."

The city responded with a statement released by spokeswoman Lisa Bedian Friday afternoon. It said city officials were surprised by the lawsuit. State legislators and Drury representatives told the city to ask voters again as a tourism tax, it said.

The previous tax was a gross receipts tax that the city could use for general expenses. The proposed tax would be restricted to spending on tourism.

"We're doing what they asked us to do, and now they're suing us," the statement said. "First they told St. Peters voters that their votes don't count; now they're trying to tell St. Peters voters they can't even vote on the issue."

The original tax passed with a little more than 70 percent approval in 2004. Legislators nixed it in 2005 through a new law that prohibited the city from collecting a hotel license fee of more than $1,000 per year. The law also limited hotel taxes in Woodson Terrace and Edmundson.

The current countywide tax of 5 percent on hotel guests goes to the St. Charles County Convention and Sports Facilities Authority.

Some other cities in St. Charles County also have their own taxes. Karen McDermott, finance director for the City of St. Charles, said the tax there is .75 percent. David Rosenwasser, director of the city's Greater St. Charles Convention and Visitors Bureau, said his organization also has a 1 percent tax applicable to food, beverage and lodging sales.

The City of O'Fallon has a 5 percent tax on hotel stays, said spokesman Tom Drabelle.

The City of Wentzville does not have its own hotel tax.

Sales taxes in St. Peters currently total 7.5 percent. Hotel stays, adding the countywide amount, are 12.5 percent. The new tax would make the overall tax 17.5 percent.

The city's statement said lobbyists and legislators targeted St. Peters and a few other cities while other cities were allowed to collect their taxes.

Drury said he knows revenues are down for cities. "Instead of looking for ways to cut their expenses, they're looking for ways to increase their revenues," he said.

The lawsuit also names the county's election authority and Director Rich Chrismer as defendants. Chrismer said Friday that most of the absentee ballots already have been printed. Absentee voting begins Sept. 21, he said.

Circuit Judge Nancy Schneider has given the parties until Sept. 20 to file pleadings.

Similar lawsuits were filed in St. Louis County this week against the cities of Richmond Heights and Clayton. Drury is not a plaintiff in those lawsuits.

For more information on this subject, check for Post-Dispatch writer David Nicklaus' column on Sunday.


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