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Judge Rules Against City of Tulsa in Lawsuit Over Tourism Improvement District

A citywide hotel tax intended to enhance Tulsa’s tourism marketing efforts has been declared invalid.

In a lawsuit filed by a group of hoteliers objecting to the Tourism Improvement District, Judge Linda Morrissey ruled on Thursday the City of Tulsa did not have legal authority to set a threshold of 110 rooms before hotels are subject to the proposed 3% assessment.

State law allows such taxing districts on hotels with 50 or more rooms, and Morrissey’s ruling said the city went with a higher number because smaller hotels didn’t support the plan.

Attorney and stakeholder in Aloft Hotels Lee Levinson represented hoteliers who sued to block the TID and said the 3% tax on gross receipts was a "huge fee."

"If you charged a 3% fee on grocery stores in Tulsa, you wouldn’t have any. I would say that half the restaurants in town would have to close," Levinson said.

Kyden Creekpaum is an attorney for an intervenor in the case and said they will appeal.

"We believe this result goes against, really, the common-sense understanding of assessment districts generally. It invades the legislative authority of the city council, and, frankly, it’s an erroneous reading of the statute," Creekpaum said.

The TID was expected to generate $3 million to $4 million a year for marketing. A private nonprofit created by the Tulsa Regional Chamber would have handled the funds.

Levinson said smaller hotels took issue with that structure and its potential lack of transparency. He and plaintiffs in the lawsuit plan to propose their own TID that will apply to hotels with 50 rooms or more.

"I believe we’ll raise maybe two to three times more money than the 110 rooms, and we will have accountability where our money’s spent," Levinson said.

Matt Trotter joined KWGS as a reporter in 2013. Before coming to Public Radio Tulsa, he was the investigative producer at KJRH. His freelance work has appeared in the Los Angeles Times and on MSNBC and CNN.