Hiawatha voters approve hotel/motel tax in Tuesday election

HIAWATHA — Hiawatha voters on Tuesday approved a 7 percent room tax on overnight hotel stays within city limits in a “proactive” move aimed at capturing future earnings.

Roughly 73.8 percent of voters in Tuesday’s municipal election were in favor of the ballot measure while 26.2 percent were opposed. A total of 1,117 votes were cast on the matter, which required a simple majority to pass.

Notably, Hiawatha currently has no hotels or motels within city limits, but the City Council in August voted to put the matter on this year’s ballot as a “proactive” move to ensure maximization of future earnings.

“You can only have an election every so often, so if we don’t pass a hotel/motel tax and we actually get a hotel, we would lose that revenue from the 7 percent tax” in the meantime, Mayor Steve Dodson previously told The Gazette. “We want to be preemptive with this.”

The 7 percent tax will be paid by lodging visitors and have no impact on residents’ own taxes. All revenue collected from the tax will then be distributed back to the city on a monthly basis.

Under state code, at least 50 percent of the collected hotel/motel taxes must be used for the promotion and encouragement of tourist and convention traffic with potential uses including economic development work and/or the improvement of local parks or other cultural amenities.

Similar lodging taxes are commonplace in Iowa, and state data shows that more than 200 jurisdictions have enacted such measures — including other Linn County communities such as Cedar Rapids, Marion and Mount Vernon.

View more of The Gazette’s elections coverage online at thegazette.com/2025-election-results/.

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