The COVID-19 pandemic has had a devastating effect on the hotel industry. While occupancy levels in 2017, 2018 and 2019 averaged about 66% nationwide, the American Hotel and Lodging Association projects an average occupancy rate of approximately 38% for 2020. Of the 1,564 hotels across Pennsylvania, more than 1,000 are threatened with closure without taking some course of action.

Pennsylvania Governor Tom Wolf recently announced that $145 million dollars will be made available statewide to the hospitality industry through the COVID-19 Hospitality Industry Recovery Program. Under the program, grants may be awarded to eligible businesses in $5,000 increments with a maximum distribution amount of $50,000. Although this is welcome news, it will not allow the industry to fully recover.

Hotel owners and operators must obviously reduce operating costs in order to survive the COVID-19 pandemic and should accordingly examine the real estate taxes being paid on their buildings. In Pennsylvania, most tax assessments on hotel properties are based on the income method – if occupancy is significantly down, then income is significantly down. A successful tax assessment appeal could result in significantly reduced real estate taxes.

The deadline for filing a tax assessment appeal in Allegheny County is March 31. Commercial and industrial tax assessment appeals can be complex, and the stakes can be high. It is important to be represented by experienced, capable legal counsel. We can evaluate the merits of a possible appeal of your assessment, and recommend a proper course of action.

For more information
The attorneys and staff at Bowles Rice have experience with commercial tax assessment appeals throughout Western Pennsylvania, and the team in our Southpointe office is prepared to assist. Please contact Jim McCune or Sharon Menchyk to discuss the merits of a tax assessment appeal for your property, or visit our Commercial and Industrial Tax Assessment Appeals page for more information.