Michigan House Bill HB4931

Michigan 2023-2024 Regular Session

• Introduced: 8/23/23
• Refer: 8/23/23

Caption

Taxation: hotel-motel; hotel tax; modify. Amends secs. 1, 2, 3, 4, 6 & 7 of 1974 PA 263 (MCL 141.861 et seq.) & adds sec. 2b.

Impact

The bill introduces a structured approach for counties to collect excise taxes, which are earmarked to enhance convention and entertainment facilities, as well as to support tourism promotion. It enables counties with specific demographic characteristics to enact or continue enforcing the tax, potentially leading to increased funding for local projects that could stimulate economic growth. Revenues from this tax are intended for improving tourist attractions and managing the expenses associated with the administration of the excise taxes.

Summary

House Bill 4931 proposes amendments to the existing 1974 PA 263, which allows counties in Michigan to impose an excise tax on businesses offering accommodations to transient guests. The bill specifies that this tax can be levied on all persons engaged in such businesses, excluding hospitals and nursing homes, and outlines the criteria for counties that can enact such ordinances based on population metrics. The legislation is aimed at fostering local government autonomy while also generating revenue from tourism-related activities.

Contention

Notably, HB 4931 stipulates that new or increased excise taxes can only be imposed following approval from a majority of qualified electors in the county, adding a democratic check to the legislation. This aspect may spark debates regarding local governance and fiscal policy, as there may be differing opinions on the necessity and effectiveness of such taxes. Additionally, the potential increase in tax rates from 5% to 10% has raised concerns among industry stakeholders about the affordability of lodging options in the state.