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Hoteliers take tax battle to Court of Appeal

Auckland’s tax on accom providers will face a new legal challenge, with a group of hoteliers this week launching an appeal against a High Court ruling in favour of the levy.

The Commercial Accommodation Rate Payers (CARP) are questioning whether the High Court has correctly applied the law in backing Auckland City Council’s policy.

The Accommodation Providers’ Targeted Rate, or APTR, has been derided by the sector since it was introduced in mid-2017 by Auckland mayor Phil Goff as a way to raise $14 million annually for tourism and events promotions.

A group of hoteliers formed CARP and in 2019 sought a judicial review on behalf of the city’s accom providers,  but the High Court last month rejected the hoteliers’ case in a major win for the council.

Now CARP’s four plaintiffs, CP Group, Millennium & Copthorne Hotels, MLC Scenic and Troy Clarry, have unanimously decided an appeal is justified given the “significance of the issue and its impact on Auckland hotel owners and operators”.

In a statement, the group said the APTR “is not common sense but unfair, inequitable and very poor public policy particularly at this time when tourism and other export industries are facing an international crisis”.

The New Zealand Hotel Owners Association (NZHOA) has welcomed the decision to appeal, executive director Amy Robens saying: “The impact of this targeted rate on Auckland hotel owners, who are already under financial strain with COVID-19, is significant – increasing their rates threefold in some cases and is costing them hundreds of thousands of dollars”.

She continued: “Hotel owners fully appreciate the need to pay for growth infrastructure and they are happy to pay their fair share but maintain that they are already doing that through rates, taxes and compliance costs.”

Peak body Hospitality New Zealand has also welcomed the appeal, CEO Julie White arguing targeted rates and bed taxes are an inequitable funding mechanism.

“Only a quarter of visitor nights in Auckland are spent in commercial accommodation – the rest in non-commercial (Airbnb, Bookabach) whom the Council is failing to collect from in any major way,” she said.

“Only nine percent of visitor spend comes from accommodation.  The APTR should be spread fairly across all those who benefit from tourism.”

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Kate Jackson

Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions: editorial@accomnews.co.nz

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