Emergency Tourism Dollars Won’t Overcome #AZ’s Bad Reputation (video)

Arizona House

The Commerce Committee had a rousing debate over HB 2161 this week. It allows municipalities and counties to create multiple quasi-governmental taxing authorities (called marketing authorities) across the state.

The concept behind 2161 is that local governments can designate a specific geographic area to be within the marketing authority with the consent from 67% of the lodging establishments within the boundaries. Hotels and other lodging establishments inside the marketing authority would agree to add a bed tax (or in some cases an additional bed tax) to the per night room rate. Proceeds from the new tax from the multiple marketing authorities across the state would be sent to the Department of Revenue, who would process the new tax funds, and, in turn, return the bed tax money to the local governments who would funnel the money to the Board of Directors for the marketing authority and the local tourism bureau to be used for advertising the area. I am against this bill for multiple reasons:

  1. I don’t think the state should abdicate taxing authority to quasi-governmental authorities because they are not accountable to the taxpayers.
  2. This is a tax on consumers, but consumers will get no direct benefit (unless they want a housekeeping or wait staff job in the future).
  3. This bill creates more bureaucracy locally and at the state level. Proponents say this won’t cost the state any money. I disagree. It will enable creation of an unknown number of new taxing districts with different tax rates which all send funds to DOR for processing. DOR funnels the money back to local governments and to the local tourism bureaus to be used for advertising. That process is not free. It will obviously require significant personal time, new procedures, database augmentation for the new taxes, and more.

Continue reading Emergency Tourism Dollars Won’t Overcome #AZ’s Bad Reputation (video)