SF 2045 (LSB 5519SS (3) 88)

SENATE FILE 2045

BY  WHITING

A BILL FOR

An Act concerning hotel and motel taxation, providing for other properly related matters including the creation of a local hotel and motel tax account and board to administer locally imposed hotel and motel taxes, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423A.5A, subsection 3, Code 2020, is amended to read as follows:
   3.  Unless otherwise provided in this section, the lodging provider shall obtain a sales tax permit, collect the state-imposed tax under section 423A.3 and any locally imposed tax under section 423A.4 shall be collected by the lodging provider from the user of that lodging, and shall be remitted remit the tax to the department. The lodging provider shall add the state-imposed tax to the sales price of the lodging and the tax, when collected, shall be stated as a distinct item, separate and apart from the sales price of the lodging and from the locally imposed tax, if any. The lodging provider shall add the locally imposed tax, if any, to the sales price of the lodging and the tax, when collected, shall be stated as a distinct item, separate and apart from the sales price of the lodging and from the state-imposed tax.
    Sec. 2.  Section 423A.5A, subsection 4, paragraph e, Code 2020, is amended to read as follows:
   e.  Notwithstanding any other provision of this section to the contrary, if a lodging facilitator and its affiliates facilitate total rentals under this chapter and chapter 423C that, the lodging facilitator shall not be required to collect tax on the amount of sales price that represents the lodging facilitator’s facilitation fee under the following circumstances: 
   (1)  In a county with a population of fifteen thousand or less, if the total rentals are equal to or less than an aggregate amount of sales price and rental price of ten thousand dollars for an immediately preceding calendar year or a current calendar year, or in ten or fewer separate transactions for an immediately preceding calendar year or a current calendar year, the lodging facilitator shall not be required to collect tax on the amount of sales price that represents the lodging facilitator’s facilitation fee.
   (2)  In a county with a population greater than fifteen thousand, if the total rentals are equal to or less than an aggregate amount of sales price and rental price of five thousand dollars for an immediately preceding calendar year or a current calendar year, or in five or fewer separate transactions for an immediately preceding calendar year or a current calendar year.
    Sec. 3.  Section 423A.7, subsection 3, Code 2020, is amended to read as follows:
   3.  Moneys received by the city or county from this fund shall be credited to the general fund of the city or county, subject to the provisions of subsection 4.
    Sec. 4.  Section 423A.7, subsection 4, paragraphs a and b, Code 2020, are amended by striking the paragraphs and inserting in lieu thereof the following:
   a.  A city or county that levies the tax shall establish a hotel and motel tax account within the general fund of the city or county. All of the revenues received by the city or county pursuant to subsection 2 shall be deposited into the account. Interest earned on revenues deposited in the account shall remain in the account and be used for the purposes specified in this section.
   b.  (1)  The governing authority of each city or county that levies the tax shall establish a hotel and motel tax board comprising of an even number of members, but in no event shall the board be less than four members, to spend at least fifty percent of the revenues in the account on the promotion of tourism in the city, county, or surrounding areas. One-half of the members of the board shall be from the tourism industry, and one-half of the members of the board shall be local hotel, motel, or resort owners, or be designees of such owners.
   (2)  The remaining revenues not subject to subparagraph (1) may be spent by the city or county that levies the tax for any city or county operation authorized by law as a proper purpose for the expenditure within statutory limitations of city or county revenues derived from ad valorem taxes.
    Sec. 5.  Section 423A.7, subsection 4, paragraphs c and e, Code 2020, are amended to read as follows:
   c.  Any city or county which levies and collects the local hotel and motel tax authorized by section 423A.4 may pledge irrevocably an amount of the remaining revenues derived therefrom from the local hotel and motel tax as set forth in paragraph “b”, subparagraph (2), for each of the years the bonds remain outstanding to the payment of bonds which the city or county may issue for one or more of the purposes set forth in paragraph “a” for the purpose of promoting tourism or for any other purpose authorized by law. Any revenue pledged to the payment of such bonds may shall not be credited to the spending requirement of paragraph “a” “b”, subparagraph (1).
   e.  A city or county, jointly with one or more other cities or counties as provided in chapter 28E, may pledge irrevocably any amount derived from the remaining revenues of the local hotel and motel tax as set forth in paragraph “b”, subparagraph (2), to the support or payment of bonds issued for a project within the purposes set forth in paragraph “a” and located within one or more of the participatory cities or counties or may apply the proceeds of its bonds to the support of any such project the purpose of promoting tourism or for any other purpose authorized by law. Revenue so pledged or applied shall not be credited to the spending requirement of paragraph “a” “b”, subparagraph (1).
    Sec. 6.  NEW SECTION.  423A.8  Good-faith effort to collect tax.
   A land use district, city, or county, including a city or county acting jointly with other local governments, shall expend a portion of the remaining revenues of the local hotel and motel tax in section 423A.7, subsection 4, paragraph “b”, subparagraph (2), for paid advertisements or public service announcements that disseminate information about the law requiring lodging providers to obtain a permit and to collect the state and locally imposed taxes under this chapter.
    Sec. 7.  APPLICABILITY.  This Act does not apply to bonds issued prior to the effective date of this Act or to the proceeds of such bonds.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill concerns hotel and motel taxation, including the creation of a local hotel and motel tax account and board to administer locally imposed hotel and motel taxes.
   The bill specifies that a lodging provider shall obtain a sales tax permit when renting lodging in this state, and remit any tax collected to the department of revenue. 
   Code section 423A.2 defines “lodging facilitator” to mean person or any affiliate of a person, other than a lodging provider or a lodging platform, that facilitates the renting of lodging and collects or processes the sales price charged to the user.
   The bill provides that a lodging facilitator shall not be required to collect the state and local hotel and motel tax on the amount of the sales price that represents the lodging facilitator’s fee under the following circumstances: in a county with a population of 15,000 or less, if the yearly total rentals are equal to or less than $10,000, or there are 10 or fewer yearly transactions; or in a county with a population greater than 15,000, if the yearly total rentals are equal to or less than $5,000, or there are five or fewer yearly transactions. Current law, regardless of the size of the county, does not require the lodging facilitator to collect the hotel and motel tax if the aggregate value of the rentals is equal to or less than $10,000 in a calendar year, or there are 10 or fewer separate transactions in a calendar year.
   If a city or county has levied a locally imposed hotel and motel tax, the bill requires the city or county to establish a hotel and motel tax account within the general fund of the city or county. The bill requires all of the revenues received by the city or county pursuant to the locally imposed hotel and motel tax be deposited into the account. Moneys in the account are not subject to transfer to any other accounts or to any other funds established by a city or county unless such transfer is for a purpose specified by law.
   The governing authority of each city or county which levies the hotel and motel tax shall also establish a hotel and motel tax board to spend at least 50 percent of the revenues in the account on the promotion of tourism in the city, county, or surrounding areas. One-half of the members of the board shall be from the tourism industry, and one-half of the members of the board shall be local hotel, motel, or resort owners, or be designees of such owners. 
   The remaining revenues not subject to expenditure by the hotel and motel tax board created in the bill shall be spent, as required by current law, by the city or county on any city or county operations authorized by law as a proper purpose for the expenditure within statutory limitations of city or county revenues derived from ad valorem taxes.
   The bill also allows an amount of the remaining revenues not subject to expenditure by the hotel and motel tax board created in the bill to be irrevocably pledged to the servicing of bonds to promote tourism or for any other purposes authorized by law. The bill specifies a city or county may enter into 28E agreements or jointly service such bonds with other cities or counties.
   The bill requires a portion of the remaining revenues not subject to expenditure by the hotel and motel tax board created in the bill to be spent for paid advertisements or public service announcements that disseminate information about the law requiring lodging providers to obtain a permit and collect state and locally imposed hotel and motel taxes.