Statewide lodging tax bill headed to governor's desk

By Tom Coulter

CHEYENNE — A 5% lodging sales tax proposal won final approval from the Senate on Friday afternoon, marking passage of the only tax measure aimed at putting a small dent in the roughly $200 million revenue deficit facing the state in the next few years.

If signed into law by Gov. Mark Gordon, who has stated his support for such a proposal, House Bill 134 would implement an additional 5% sales tax on in-state lodging services. Three-fifths of that tax revenue would go to an account to promote tourism in the state, while the remaining two-fifths would be distributed proportionately to the counties and cities where it was collected.

After passing out of the House last week, House Bill 134 was approved in the Senate by a narrow 16-13 vote, but not before lawmakers debated the legislation and several accompanying amendments, all of which failed.

The road to imposing a statewide lodging tax has been a long one in Wyoming. Last session, a similar lodging tax proposal died in the Senate by a 19-7 vote. Sen. Eli Bebout, R-Riverton, said it was an “arduous task” to get the bill to the floor.

Other senators gave full-throated speeches in favor of the bill, which would generate roughly $9.3 million in its first year and $18.6 million in subsequent years for promotion of Wyoming’s tourism industry - and free up money for other uses in the state’s general fund.

“This industry deserves your vote of confidence today,” Sen. Mike Gierau, D-Jackson, said. “For those of you who think this is a tough vote philosophically, I promise you that in a day not too far away, you’re going to regard this as one of your best votes. ... You want to diversify the economy? This is your chance!”

About 85% of the tax will be paid by people visiting from out of state, as noted by Sen. Hank Coe, R-Cody. Yet many legislators opposed to the tax argued it would hurt the tourism industry in less-populated areas in the state. Sen. Dan Dockstader, R-Afton, said the state’s rural areas “are being left out” as the bill is currently written.

Sen. Liisa Anselmi-Dalton, D-Rock Springs, who manages a few hotels in southwest Wyoming, also spoke against the bill. Many people who travel within the state operate on tight budgets, the senator said, recalling a mother who didn’t have the $10 her son needed for a cross-state sporting event.

“Not everyone has this silver spoon in their mouth, and I just ask you to think about the residents who take their boats across the state or travel with their sports teams - not all of them are that lucky,” Anselmi-Dalton said.

With the state facing long-term uncertainty in its oil, natural gas and coal industries, however, others saw the investment in the Wyoming Office of Tourism as a way to foster growth in areas beyond energy.

“We need this for the future of Wyoming,” Sen. Jim Anderson, R-Casper, said. “If you look up in 10 or 20 years, this could possibly be our number-one industry.”

The bill marks the only tax measure with the support of Gordon, who has voiced support for the tax proposal in recent months. In a statement provided to the Wyoming Tribune Eagle following Friday’s vote, Gordon commended those who supported the legislation, which he said “reflects a true agreement between industry and state government.”

“This bill allows Wyoming’s tourism industry to sustain itself and control its own future,” Gordon said in the statement. “Wyoming is competing with our neighbors for visitors and tourism dollars. We must continue to stimulate tourism in all regions of our state, not merely those that receive heavy visitation.”

While HB 134 appears likely to become law, other tax proposals were either defeated in the Legislature or not introduced at all. Legislation to create a corporate income tax, which generated a lot of debate during the 2019 session, was not considered for an introductory vote this year.

After winning approval in the Senate, HB 134 will go to a joint conference committee, where a few senators and representatives will settle any differences over amendments, before it heads to Gordon’s desk for consideration.