House passes statewide lodging tax

CHEYENNE — The Wyoming House of Representatives passed a statewide lodging tax, delivering on one of the majority party’s promises to modernize the tax structure without increasing taxes on Wyoming families.

According to a press release from Representative and House Speaker Pro Tempore Albert Sommers, House Bill 66 was introduced by the Joint Revenue Interim Committee, and removes funding of the Wyoming Office of Tourism from the General Fund and creates a reliable, steady source of revenue. 

“With 80 percent of lodging tax collections paid for by out-of-state visitors and the support of industry, we can dedicate that money to funding the Wyoming Office of Tourism,” said Speaker Steve Harshman. “By creating a self-sustaining funding model for tourism, we can ensure a reliable source of revenue for the industry not paid for by hard-working Wyoming families.”

According to Rep. Mike Greear (R-Worland), information regarding who pays the lodging tax came from the lodging industry.

According to a report on the economic impact of travel on Wyoming by Dean Runyan Associates for the Wyoming Office of Tourism, “U.S. residents of states other than Wyoming accounted for approximately three-quarters of all travel spending in Wyoming in 2017. Residents of Wyoming accounted for 20 percent, while international visitors accounted for about 5 percent of travel spending in the state.”

Greear added that “They commented that 50 percent of the tax will be collected in Teton County. This tax has been discussed during the interim the last two years and came out of the Revenue Committee’s interim work this year.”

Greear said the bill was assigned to the House Minerals, Business and Economic Development Committee, which he chairs, “so that it could have one more set of eyes on it before it was sent to the House Floor.”

“This is just another move to create consistent revenue streams for many of our state agencies,” said Sommers. “Similar to what has been done with the Wyoming Game and Fish Department and the Wyoming Department of Transportation, this bill will give the Office of Tourism more stability in its funding.”

“Having spent the majority of my career in the hotels and hospitality industry, I know the importance of a vibrant Office of Tourism,” stated Representative Pat Sweeney. “Wyoming residents are paying much higher lodging tax rates every time they travel outside Wyoming. We might as well be recouping these costs from the millions of tourists visiting Wyoming every year. This bill will level out the uncertainty we have seen in past years surrounding tourism budgets and support Wyoming’s second largest industry.”

Greear said, “Voting for any tax is difficult, and always unpopular. But the fact remains that even with all the cuts over the last four years and a rebound in oil production the State of Wyoming has a structural deficit. The lodging tax will take the Department of Tourism off the General Fund and free up $13 million a year that will help with the structural deficit. In addition, it will diversify our tax base. With the war on coal and other fossil fuels the State of Wyoming will sooner or later need to take a much harder look at our tax structure, but for now this is a small step. I don’t have the appetite for a larger step, as I believe that there are still more cuts to be made and more efficiencies to be found.”

Rep. Jamie Flitner (R-Greybull), who also voted in favor of the bill with Greear said she voted for the bill based on the numbers provided by the lodging tax and an amendment by Rep. Brown.

According to the bill as amended, 80 percent of the average annual revenue collected under this subsection during the immediately preceding five years shall be deposited each year in the Wyoming tourism account. No funds shall be expended from the account until appropriated by the Legislature.

“With the amendment any overage (once the corpus and reserve accounts are filled) revenue will spill into the School Foundation Account,” Flitner said.

She added, “I know this will impact Wyomingites. My first thought was of all those parents and grandparents who follow their children to various events. But tourism is our second greatest driver of dollars right now. To continue to encourage travelers to our state we need to market those folks. A vital tourism office is essential.

“The removal of the tourism office from the general fund will free up much needed revenue for other governmental needs such as health care.”

THE BILL 

House Bill 66 would institute a 5 percent statewide lodging tax with 3 percent being diverted to a Wyoming Tourism Account and the remaining 2 percent going back to local communities as a replacement for a portion of the local option lodging taxes in each county or municipality. Based on the fiscal note provided by the Legislative Service Office, visitors to the state alone would generate nearly $16.6 million for the Office of Tourism, while reducing the maximum rate local governments can levy from 4 percent to 2 percent.

According to the LSO, if any city, town or county has a local lodging tax in place as of January 1, 2020, the current rate would continue until the next general election. While local governments would initially receive increased revenues, this revenue increase to local governments would decrease as current local lodging taxes above the new 2 percent cap expire.

Greear said, “The bill as drafted will only allow a 7 percent tax lodging tax in total and will protect the local visitor boards. These issues were some of the main sticking points that prevented the bill from going forward last year.”

He added, “If this passes the highest sales tax rate allowed in Wyoming is 6 percent with local options and the highest lodging tax that can occur is 7 percent for a total of 13 percent of tax on a room. Prior to the debate, I looked at my invoices for my travel for Wyoming Sugar for the last 18 months and the lowest tax rate that I paid anywhere was 18 percent, in Minnesota. It was as high as 35 percent in some states.”

Rep. John Winter (R-Thermopolis) was one of the 16 nay votes last Thursday. The bill now moves to the Senate for consideration. The Wyoming Legislature resumes work today after a three-day weekend.