Bill would create statewide lodging tax, hike Teton County bed tax to 5% and potentially 7%

JACKSON HOLE, WYO – Perhaps no county of the 23 in Wyoming is more closely watching a bill winding its way through the process in Cheyenne than Teton. In a valley that swells in summer and winter with park and resort visitors, mitigating that impact has been a growing concern.

House Bill 66 is a game-changer on that front. The bill would establish a statewide lodging tax of 5%, with 3% of revenue generated going toward state tourism promotion and 2% allotted to counties for their own marketing efforts. This mandated 2% could be supplemented by another 1 or 2% (max) imposed by local municipalities. The highest a lodging tax could be in any county would be 7%.

As in the case with Teton County, where voters narrowly chose to renew a 2% local lodging tax last fall, the local portion of the ‘bed tax’ could double to 4%. If passed, the portion of statewide lodging tax mandated for each county (2%) would not go into effect until that county’s next general election. What that means for each county differs. For a county already imposing a 4% lodging tax, for instance, that county would subsequently have to reduce its local lodging tax to 2% in order to be in compliance with state statute maximum of 4% lodging tax imposed locally.

In the case of Teton County, the 2% local lodging tax would remain in place until the general election in 2022. At that time the statewide county-mandated 2% portion would kick in and Teton County voters would again go to the polls to renew or not renew the local 2% lodging tax. So, by 2020, Teton County will either be levying 5%, 6%, or 7% lodging tax depending on what voters decide.

Teton County voters struggled with the tax last November—some viewing it as the bogeyman for traffic and overcrowding caused by overpromotion; others pointed at the mitigation portion of the tax revenue as crucial to funding vital services in the county. The new state law would make a 2% local lodging tax mandatory and permanent for every county in Wyoming, with each county able to choose for itself to add their own additional 2% or not.

The reasoning behind the Joint Revenue Interim Committee sponsored bill is two-fold. Some state leaders see it as a way to help fund promotion and marketing of Wyoming, as tourism is often touted as the No. 2 industry behind the energy sector. In fact, the bill was introduced to the Minerals committee yesterday.

The main impetus behind the bill, however, is money. As the state is faced with dwindling revenue due to the downturn in coal and oil markets, talk of taxation has heated up. State leaders conducted revenue estimates in October when oil was trading at $70 a barrel—it’s now closer to $40/barrel. Budget-tightening will rule the day for the next 40 days in Cheyenne.

The Republican-dominated Legislature in Cheyenne is traditionally opposed to raising or creating taxes even though, this session, several are on the docket including a potential state income tax and higher property tax. But a tax aimed mostly at non-Wyoming residents might just fly even with the staunchest of conservatives at the capitol.

HB66 would create a state tourism account that would be used to fund the Wyoming Office of Tourism via the new lodging tax. This would free up money in the general fund for the state to use elsewhere.

The tax could bring in a projected $9.7 million for the tourism office in FY2020, and double that the following year. It would also help the state’s tourism office to better fund promotional efforts. Wyoming ranks 31st among the nation’s tourism offices in terms of its budget.

How would a state lodging tax go over in Jackson Hole?

Residents in Teton County often bemoan the idea of tax revenue being used for the promotion of tourism. ‘We’ve already got more than we can handle,’ many believe.

It’s an enviable position to be in. Other counties in the state would kill for such ‘problems.’ While some places in Wyoming are being loved to death, many other communities could benefit from a little self-promotion.

And Teton County has it better than others (and like no other) when it comes to how it is allowed to spend the money.

Local businesswoman Clarene Law was instrumental in getting legislation passed years ago that allowed Teton County, and only Teton County, to use funds from the lodging tax in a 60-30-10 split—meaning 60% must be used for marketing, 30% is used for visitation impact, and 10% goes into the general fund of town and county government.

The formula has allowed Teton County to do more mop-up and less marketing than other communities. In addition, the Travel and Tourism Board (TTB) has pushed the envelope in years past, expanding the definition of promotion by using the 60% in unique ways like funding educational aspects of ecotourism or paying for cross-country ski trail grooming in Grand Teton National Park.

A recent Attorney General opinion questioned whether the TTB’s interpretation of ‘marketing’ wasn’t a bit broad and over-reaching, causing the group to back off a bit, but, as Senator Mike Gierau pointed out recently at a Chamber of Commerce Business Over Breakfast event, there’s a new sheriff in town.

“We’ll have a new AG in 2019,” Gierau said, referring to new attorney general Peter Michael. “And we have a bill (HB66) in the works. The consensus is to let the bill come out clean from committee without too many changes. We can then make constructive changes that Teton County needs when it’s on the floor.”

One thing Teton County will ‘need’ is the ability to spend the mandatory 2% lodging tax revenue in the same manner it currently splits its own 2%: 60-30-10. The bill appears to read that way in current form but local lawmakers will want to make sure.

Rep. Andy Schwartz said he’s also had some early convos with his peers about that how that 60% promotion money is spent.

“I’ve been talking to legislators from around the state. They kind of agree to expanding the definition of promotion to include visitor impact, education aspects, enhancement of the tourist experience, events as promotion and those kind of things,” Schwartz said.

“I think I can get support for this. It doesn’t always happen the first try but I am confident we can make that change.”

Rep. Jim Roscoe also agreed Teton County is unique in that it needs a special approach to advertising for tourists.

“House Bill 66 passed through Joint Revenue easily. I agree we can amend it on the floor,” Roscoe said. “It’s important to get people here, but also to make sure they are happy when they leave.”

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