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WTIC November 2017 Legislative Update
As we head through the Fall and towards Winter and the 2018 Legislative Budget Session the Wyoming Legislature has been engaged in a very busy interim. Seeking solutions to fund the $400 Million deficit with Education Funding.
The Joint Revenue Committee has been tasked with drafting three separate proposals to help offset the $400 million shortfall for education funding in Wyoming. The committee intends to draft plans that generate $100 million, $200 million and $300 million between now and the start of the 2018 Budget Session.
The committee met five times this interim with one more set of meetings to go before completing their interim work. Various tax proposals have been discussed. Several bills seeking to increase liquor fee’s and beer taxes will be considered at their December meeting. The committee will also consider a bill to tax services and user fees. Fortunately the discussion surrounding a gross receipts tax has finally subsided some. While the issue will not be considered further for this coming session, the committee has requested that the secretary of state compile information relating to businesses gross receipts so that the state has additional data to consider at a later time. That bill as well as the majority of tax proposals that the Joint Revenue Committee will consider will be at their December 4,5 meetings in Cheyenne.
Alternate Funding for the Wyoming Office of Tourism
As an industry, the Wyoming Lodging and Restaurant Association, the Wyoming Travel Industry Coalition and the Wyoming Tourism Board have been meeting for the past year researching how all other states fund their tourism office. Our boards and the industry we have spoken with to date feel strongly that the states second largest industry should be fully funded with a dedicated funding source aimed at growing the industry and the tax base that it produces rather than to hope for the best trying to minimize continued cuts during difficult financial times. After a joint retreat held this past spring the boards agreed to explore a proposal of a 1% tax on the leisure and hospitality sector of the NAICS codes (the 7000 series) to provide a long range, competitive and dedicated funding source for the Wyoming Office of Tourism. Members of the WLRA, Wyoming Office of Tourism and the Wyoming Travel Industry Coalition have traveled the state all summer and fall meeting with industry leaders to gain feedback and direction with this proposal.
Members of the hospitality and tourism industry testified in favor of the 1% tourism tax at the November Joint Revenue Committee meetings in Cheyenne and the committee voted to have the bill considered at their Dec meetings.
There were several amendments to the draft bill, all of which we supported.
1. Dan Noble from the Wyoming Dept. of Revenue (DOR) testified that when discussing the tourism tax with his colleagues in South Dakota they strongly advised him not to call it a tourism tax. They said that they are inundated with calls from residents wondering why they are paying a tourism tax. We agreed that “Leisure and Hospitality” tax was a more appropriate title and the committee agreed.
2. In order for the bill to tax those businesses that we intended but not tax those that do not already collect tax within the 7000 series NAICS codes the DOR amended the “exemption” language slightly to better reflect the original intent. The bill will now be amended to reflect the original intention of who specifically is taxed within the NAICS codes. The committee passed this amendment.
3. The DOR also noted that the July 1, 2018 effective date currently listed on the bill was likely too soon for them. They requested that the effective date be January 1, 2019. The committee agreed.
4. Feedback from our industry has strongly indicated concern that the funding collected would not go to tourism funding. The bill is written to create a new tourism account that 100% of the collections will go into with the bill requiring the funds be spent on tourism. The funding will still require legislative oversight and the Wyoming Office of Tourism would still need to go through the budget approval process with the Joint Appropriations Committee. To legislators this is known as “earmarking”. To offset concerns about “earmarking” we proposed that in addition to the biennium funding, no more than one year of reserves could be held in the account and also that the account could not grow by more than 3% each year (with any funds in excess of 3% growth reverting into the general fund) This is likely only the start to discussions about “side boards” within the bill but the committee voted in support of it and it represented a good place to start the discussion.
We cannot say thank you enough to the industry representatives that attended todays meeting and spoke in favor of this initiative! John Johnson, Gail Burkis, Darren Rudolf, CJ Box, Tony O’Brien, Christine Hill and Zannie Driskill! Your testimony is THE most important and your efforts make the difference- thank you!
Outside of the Joint Revenue Committee, several legislators have been exploring the possibility of a statewide lodging tax to be the dedicated funding source for tourism. The WTIC opposes a statewide lodging tax and is in continued discussions assessing the political landscape surrounding it.
Please continue to monitor the WTIC e-newsletter for current updates to these and any other policy discussions or actions taken related to hospitality and tourism. Please contact Chris Brown at email@example.com for any questions or additional information.