Statewide lodging tax proposal moves forward

By Nick Reynolds

Casper Star-Tribune

Via Wyoming News Exchange

CHEYENNE – Tax reform – not tax increases – is a priority for Republican leadership in the Wyoming legislature this year. 

Speaker of the House Steve Harshman, however, was in attendance Monday at a meeting of the Minerals, Business and Economic Development Committee to advocate for one piece of legislation that will actually introduce new revenue. 

The 5 percent statewide tax would be split into two components — a 3 percent tax levied statewide, and the option for a local tax up to 2 percent — that in theory, would fund the state’s tourism budget independently from the state’s primary spending account. 

According to advocates of the bill, this legislation would allow tourism to become self-sufficient and would remove tourism funding — which is an easy target in times of fiscal hardship — from the ups-and-downs of the energy sector, which determines the health of the state’s general fund. 

That budgetary environment, tourism advocates have said, has resulted in a tourism funding level ranked 31st in the nation, behind neighboring states like Montana, Idaho, Utah, Colorado and even South Dakota. 

“There is room to grow our tourism,” said Harshman, a Casper Republican. “I am tired of hearing about ‘Montana’s Yellowstone.’” 

Tourism is one of the state’s biggest economic drivers. According to the Wyoming Office of Tourism, visitors spent an estimated $3.8 billion in Wyoming last year, and the industry employed more than 32,000 people — roughly 5 percent of the state’s total population. 

The legislation is a revived version of a bill introduced in last year’s budget session. Hastily introduced, that bill failed, but the concept of a statewide lodging tax has been worked throughout the 2018 interim session and has received widespread support from both economic development professionals and members of the lodging industry. 

The key to the bill’s support, so far, has been the preservation of the local option lodging tax and the delayed phase-in of the tax. The 2 percent local option would not take effect until the expiration of any existing local lodging tax. 

In Natrona County, whose voters just passed a 4 percent local lodging tax, that funding will stay the same until the local option tax comes up for a vote again in 2022. That option, according to the new rules, would max out at 2 percent. 

The changes for local governments, however, will be a net gain. According to testimony from Brook Kaufman, CEO of Visit Casper, Natrona County currently maintains a 9 percent total rate between its sales tax and lodging tax; if the bill were to pass, that number would go up to 12 percent total, closer to the industry average. 

Overall, the imposition of the tax would result in $9.7 million for the Wyoming Tourism Account in 2020, increasing to $19.5 million by 2021, according to the bill’s fiscal note. 

However, Dan Noble, the state’s director of revenue, said it was uncertain what impact the bill’s passage would have on administration and the time it would require to get the system “up and running.” 

The bill passed committee by unanimous vote and will now proceed to the full House of Representatives for its first reading.