An Act Reducing The Tax Rate On Bed And Breakfast Establishments.
Impact
If enacted, this bill would directly amend Chapter 219 of the general statutes to provide tax relief specifically for bed and breakfast establishments. By removing the occupancy tax requirement and replacing it with a sales tax rate that is typically lower, the bill intends to support local businesses within the hospitality sector. This may not only foster an increase in the number of such establishments but potentially enhance local tourism by making it more economically appealing for visitors to utilize bed and breakfast accommodations instead of traditional hotel options.
Summary
House Bill 5409 aims to reduce the financial burden on bed and breakfast establishments by exempting them from the occupancy tax applicable to hotels and lodging houses. Instead of the standard tax rate, these establishments would fall under the sales tax applicable to retailers. This legislative change is poised to provide some relief to small hospitality businesses that might struggle with the added costs of occupancy taxes, thereby encouraging the growth of the bed and breakfast sector in the state.
Contention
While the bill has supporters who advocate for the need to support small business owners in the face of rising operational costs, it may face criticism from larger hotel chains and lodging establishments that could argue it creates an uneven playing field in the hospitality industry. Concerns may arise regarding the equity of tax treatment across similar businesses, which might lead to calls for broader tax reform rather than sector-specific measures.