Despite receiving many contacts from municipal officials over the last two weeks, the Joint Finance Committee passed last night by a 9-7 vote a state budget amendment making changes to the room tax law sought by the Wisconsin Hotel and Lodging Association. The League strongly opposed this motion and thanks the many municipal officials who communicated with their state legislators about it. Your efforts resulted in close vote.
Three Republicans joined the four Democrats on the committee in voting against the motion. The seven legislators voting against were: Reps. Kooyenga (R), Hintz (D), C. Taylor (D), and Senators Vukmir (R), Marklein (R), Erpenbach (D), and L Taylor (D).
The amendment affects communities differently depending on when they implemented a room tax and how they are currently spending room tax revenues on tourism promotion and development.
The amendment makes the following changes:
1. Eliminates municipal governing body discretion to spend room tax revenues directly on tourism promotion and development. The amendment mandates that municipalities transfer the revenues designated for tourism promotion and development to a tourism entity or commission for spending.
2. Modifies the 1994 grandfather clause by requiring municipalities that retain more than 30 percent of the room tax revenue for purposes other than tourism promotion and development under ordinances adopted prior to 1994 to reduce the amount retained to the greater of 30% of current year revenues or the following dollar amounts:
a. in 2016, the same dollar amount retained in 2013.
b. in 2017, the same dollar amount retained in 2012.
c. in 2018 the same dollar amount retained in 2011.
d. in 2019 the same dollar amount retained in 2010.
e. in 2020 and thereafter, the same dollar amount retained in 2009.
The amendment also imposes new annual room tax reporting requirements for municipalities. This includes a requirement that any municipality that collected a room tax prior to 1994 to file with DOR a copy of its room tax ordinance in effect in 1994 and a copy of the municipality's financial statement from 1994 showing the percentage of room tax revenue that the municipality retained for its own purposes.
All of these changes take effect January 1, 2016.
The League will be asking Governor Walker to veto these changes.
