| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Community & Economic Development & Trade Committee | |
HB 3206
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
Brief Description: Concerning the information required to be reported in the annual economic impact report on lodging tax revenues.
Sponsors: Representatives Kenney, Haler, Rolfes and Santos.
Brief Summary of Bill |
|
Hearing Date: 1/30/08
Staff: Meg Van Schoorl (786-7105).
Background:
Lodging Tax
The lodging tax, also known as the local hotel-motel tax, is applied to charges for lodging at
hotels, motels, rooming houses, private campgrounds, recreational vehicle parks, and similar
facilities for continuous periods of less than one month. The tax rate is up to 2.0 percent and all
cities and counties that levy the tax have adopted the maximum rate. The tax is credited against
the state retail sales tax of 6.5 percent in order to prevent the customer from incurring an
additional tax.
Initially authorized in 1967 to provide King County with a funding source for the building of the
Kingdome, the lodging tax was incrementally expanded over the years to cover additional cities
and counties and fund uses. In 1997, the Legislature repealed the assortment of multiple uses for
the lodging tax and instead required the future revenues to be used for tourism-related purposes.
Tourism Promotion Expenditures
SSB 5647, enacted during the 2007 legislative session, expanded the definition of "tourism
promotion" so that lodging tax revenues could be used to make operating expenditures for
tourism promotion and for special events and festivals designed to attract tourists. The definition
of "tourism-related facility" also was modified to include property that is owned by a public
entity or a nonprofit organization including 501 (c)(6) organizations such as chambers of
commerce, destination marketing organizations, and main street organizations.
SSB 5647 also required that local governments that use the lodging tax revenues submit an
annual economic impact report to the Department of Community, Trade and Economic
Development beginning January 1, 2008. Included in the information that must be reported is the
amount of revenue spent on each tourism-related activity or facility owned by a nonprofit
organization, and the estimated number of tourists, other persons, and lodging stays generated by
the activity or facility owned by a nonprofit organization.
Summary of Bill:
Local jurisdictions that use lodging tax revenues for tourism-related activities and facilities are
required to submit an annual economic impact report including information on revenues spent by
the local jurisdiction for tourism promotion purposes and revenues spent by tax exempt nonprofit
organizations. Specific information must be included on the amount of revenue spent on
tourism-related facilities owned by a local jurisdiction and the estimated number of tourists, other
persons, and lodging stays generated by a tourism-related facility owned by a local jurisdiction.
The current requirement to report information on the estimated increase in sales and use tax
revenues attributable to the special event, festival or tourism related facility is eliminated.
Reporting must begin with calendar year 2008.
Appropriation: None.
Fiscal Note: Requested on January 28, 2008.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.