Michigan House Bill HB5443

Michigan 2023-2024 Regular Session

• Introduced: 2/13/24
• Refer: 2/13/24
• Refer: 2/14/24

Caption

Taxation: hotel-motel; excise tax on business of providing accommodations; clarify application to short-term rentals and make other modifications. Amends title & secs. 1, 2, 3, 4, 6 & 7 of 1974 PA 263 (MCL 141.861 et seq.). TIE BAR WITH: HB 5438'24

Impact

If enacted, HB5443 would enable counties with certain demographic criteria to generate additional revenue through the excise tax on short-term rental businesses. The tax rate would be capped at 5%, and counties would be responsible for administering this tax while using the revenue for various local enhancements. This could significantly improve county budgets, especially for tourism-related projects and facilities, thereby potentially boosting local economies reliant on transient tourism.

Summary

House Bill 5443 seeks to amend the existing 1974 PA 263, allowing counties in Michigan to impose and collect an excise tax on those providing rooms for transient guests, particularly targeting accommodations like short-term rentals. The bill clarifies terminology related to accommodation provisions and outlines how the generated excise tax revenue is to be managed, ensuring that funds are used for purposes such as the financing of convention facilities, tourism promotion, and local public services.

Contention

The bill may face criticism from local stakeholders concerned about its implications for small businesses and the local rental market. Critics may argue that the excise tax could impose an additional financial burden on operators of short-term rentals, ultimately affecting rental prices. Moreover, there may be concerns about how effectively counties will use the collected revenue, and questions regarding the fairness of the tax structure might arise, particularly from communities with fewer tourism activities.