Dear WH&LA Lodging Member:
First of all, today (May 1) is the official deadline for all municipalities imposing a local Room Tax to remit their first annual report to the state Department of Revenue (DOR) , covering Room Tax collected and spent in their municipality in 2016. This new requirement was passed within the state Budget in July, 2015, allowing municipalities almost 2 years to prepare for this new accountability. There has been quite a scramble of last minute filings, with some still noted as missing with only hours remaining to comply with the new law. The DOR has the authority to impose a penalty of up to $3,000 on municipalities that do not comply.
As of an hour ago, 295 municipalities had filed reports, with some still missing portions required. To see if your municipality has submitted their report and to view just what it says, go to:
- The total room tax collected and the rate imposed
- A detailed accounting of the room tax revenues required to be spent on Tourism Promotion & Tourism Development that includes a list of all such expenditures over $1,000 made by a tourism commission or a tourism entity.
- A list of each member of the governing body of a tourism entity and tourism commission members overseeing the Tourism Promotion & Tourism Development expenditures which includes their name, and their employer
- If they are a "grandfathered" municipality they must include their pre-1994 room tax ordinance as well as proof of the amount that was retained by the municipality for their own purposes from collected room tax as of May 1994.
OTHER ISSUES THE WH&LA HAS BEEN ACTIVELY WORKING FOR OR AGAINST ON YOUR BEHALF
SCHOOL START DATE REPEAL
While SB 96 and AB 103 were introduced in late February and early March and sent to the Education Committee in both the Assembly and Senate, there has been no movement since. With powerful voices and messaging from WH&LA and our tourism partner organizations at our Action Day and in numerous other meetings, interest in continuing to pursue these bills, proposing to eliminate the September 1 School Start Date is waning despite the early vocal presence of local school boards and administrators pushing it. Speaker Robin Vos was quoted as telling a group in favor of the elimination that this bill is not going anywhere in the Assembly, which in effect would end it. The WH&LA will continue to watch the bills closely in the event that something changes and we would then ask membership to engage once again.
PERSONAL PROPERTY TAX ELIMINATION
AB 277 (http://docs.legis.wisconsin.gov/2017/related/proposals/ab277.pdf) introduced by Rep. Bob Kulp on April 24 proposes to eliminate the local Personal Property Tax that municipalities can impose. Most states no longer provide this duplicate tax ability for local governments, however some municipalities have come to rely upon this added revenue from local businesses. The proposal in it's current format would require the state to reimburse municipalities for their current level of losses, however the total cost to the state is estimated at over $250 million, making the likelihood for revisions to this proposal lessening the cost likely necessary for advancement. The WH&LA is part of a coalition of over 40 business organizations pursuing elimination or at the very least reductions in the Personal Property Tax.
PREMIER RESORT AREA TAX IN LA CROSSE
In April, a La Crosse County Advisory Referendum proposed the addition of a Premier Resort Area Tax (PRAT) in the county, with the revenues going to transportation infrastructure. It passed by a slight majority of 55% in favor, catching many not expecting approval of any tax by surprise. The WH&LA has been advised that lodging properties in the county as well as the CVB do not support this added half-percent increase, and we have since been actively meeting with numerous key legislators in an effort to stop legislation or inclusion in the state budget, one of which would be the next step to enable the county to then host a Binding Referendum in the County before such a tax could go into effect. As La Crosse County does not fit the criteria required for PRAT eligibility and they would be the first county to impose a PRAT (all others enabled are municipalities, with Rhinelander the most recently added). This is a special sales tax is on over 24 SIC code businesses, with the revenue only able to be used on area infrastructure.
STATE TOURISM BUDGET
What originally was not outlined as a $260,000 the first year and $210,000 the second year reduction of administrative costs for the Department of Tourism, has since been identified as such, meaning that in the Governor's Budget the Tourism Marketing Budget would remain the same over the next two years. The WH&LA and our tourism partners will continue to pursue a $3 million over the next two years increase in this budget to enable the state to generate more state sales tax revenue (with the proven $8 gain for every $1 invested ROI) and to help further grow tourism in Wisconsin. The Joint Finance Committee is tasked with making any revisions to the state budget proposal over the coming weeks, and while most all can see the value of increasing tourism marketing to better compete with our neighboring states, this continues to be an uphill, but not impossible, battle. Anyone who has an opportunity to meet with their state legislators over the next few weeks needs to bring up the need to expand the State Tourism Marketing Budget in order to generate more state sales tax revenue from growing tourism.
EXPOSITION TAX AUTHORIZATION IN SUPERIOR
A proposal still in the modification stage is anticipated to enable the city of Superior to establish a local special Exposition tax that would be similar to Milwaukee's Wisconsin Center District, which adds a tax on lodging, restaurants, and car rentals. With a concern over the precedent for other areas that may try something similar now or in the future, the WH&LA has pointed out that original increases would have put Superior at a room tax rate exceeding all the major cities in Wisconsin as well as their primary competition of Duluth. Also of concern is what the tax could be spent on as it goes well beyond a public exposition center and enables including private businesses. As stated above, this proposal is undergoing modifications that we have not yet seen, so while we are pointing out concerns, we are holding off on an official position until the dust settles.
SHORT-TERM RENTALS
We are anticipating at least one and likely even two approaches to short-term rental laws. This is another example of proposals yet to be finalized, however we continue to advise legislators of our interest in a fair and balanced playing field for licensed lodging properties who are inspected, and collect & remit sales tax and room tax, etc. We will be watching anticipated developments closely in the coming weeks.
TRANSPORTATION BUDGET
Predicted to be the most controversial component in the state budget due to a shortage of revenue for many transportation improvements around the state as well as recent DOT negative audit findings on how monies were spent, this is the one component of the Governor's Budget Proposal that Joint Finance Committee is completely starting back from scratch on. The Governor has been repeatedly clear that a gas tax increase will not be acceptable and he would veto this, leaving the Committee to evaluate only other options. The WH&LA has been clear both in our Action Day member meetings and our meetings since then that any consideration of a Toll Road in Wisconsin would be strongly opposed as an anti-tourism approach detrimental to our industry. It will be interesting to learn what proposals Joint Finance Committee will advance.
HISTORIC BARN RENTALS
SB 137 (http://docs.legis.wisconsin.gov/2017/related/proposals/sb137.pdf) and AB 187, introduced in late March by Sen. Marklein and Rep. Tranel proposing to provide reasonable guidelines for historic barns (defined as those constructed before 1965) that could be used for social events. The WH&LA has had meetings with the bill sponsors and other organizations interested in this bill, and recently requested some modifications that we believe would help to better ensure that this would not create an advantage for barns built for commercial purposes. It has been clarified that these historic structures still would need to comply with numerous safety regulations, proper liquor licensing and food and beverage regulations. We will be watching to see if reasonable modifications can be included in an amendment before a Committee public hearing is called.
FEDERAL ISSUE
There are many federal issues that the American Hotel & Lodging Association is working and communicating on in collaboration with Partner State Associations such as the WH&LA, however we just learned of a development today that we thought would be of interest to some properties that have employed H2B Visa employees in the past or who may be considering doing so if there was an opportunity.
H2B Visas have been restricted to a total of 66,000 employees from other countries each year, with this cap always reached early in the year, making it difficult for may to fill needed seasonal positions from the reduced available labor pool. Yesterday, Congress negotiators reached a bipartisan agreement to fund the federal government until September 30 of this year. Within this agreement was language to allow the Secretary of Homeland Security, in consultation with the Secretary of Labor, the authority to raise the H-2B Visa cap when it is determined there is an economic need for employers to meet their peak season workforce need.
It is projected that Congress will pass this bill this week and send it to President Trump to sign before Friday's shutdown deadline. Without analyzing the other components of the negotiated bill, we are hopeful that potential H-2B Visa relief will be included as predicted.
There are many more bills, draft bills, and proposals just starting that the WH&LA is watching and representing our industry on, and we will continue to provide brief updates on issues in the coming weeks as possible.
Best,
