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Published on Friday, March 15, 2013

Lodging tax bill continues to move

The House version of AWC’s priority bill to maintain the current uses of lodging tax revenue, HB 1253, passed the full House on a 71-26 vote just a few hours before Wednesday’s deadline. As the bill made its way through the House, a number of changes were made. The current version:

  • Retains local ability to fund the marketing and operations of special events and festivals.
  • Retains local ability to fund the operations of tourism-related facilities.
  • Prohibits the use of lodging tax revenue for debt service on bonds issued on or after July 1, 2013, outside of King County.
  • Prohibits supplanting existing funding of capital expenditures with lodging taxes.
  • Changes the definition of tourist to “a person who travels for business or pleasure on a trip: away from their place of residence or business and stays overnight in paid accommodations; to a place fifty miles or more one way from their place of residence of business for the day or stays overnight; or from another country or state outside of their place of residence or their business.”
  • Adds a definition of “local traveler” as “a person who travels less than fifty miles from their residence or business, or a person who travels by ferry, to attend a special event or festival.”

The bill also changes reporting and the role of Lodging Tax Advisory Committees (LTAC) in cities over 5,000 population as follows:

  • All applicants must submit funding proposals directly to the LTAC.
  • Applicants must submit estimates of how the revenue will increase overnight stays and economic activity from tourists and local travelers.
  • The LTAC must submit a prioritized list and funding levels of all lodging tax applications to the funding jurisdiction.
  • The jurisdiction may choose only from applicants submitting proposals to the LTAC. The jurisdictions may only change the funding level after giving the LTAC an opportunity to review the changes.
  • Lodging tax recipients must submit a post-report evaluating the actual benefits compared to the estimates.
  • Jurisdictions must submit these reports to the Joint Legislative Audit and Review Committee (JLARC) and the LTAC.
  • JLARC must report to the Legislature about the use and economic impact of local lodging taxes every two years.

AWC will continue to refine the bill as it moves through the Senate. We appreciate all of the cities who have contacted legislators in support and worked with us to perfect the bill.

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