Michigan House Bill HB5048

Michigan 2023-2024 Regular Session

• Introduced: 9/26/23
• Refer: 9/26/23
• Refer: 9/27/23
• Report Pass: 10/4/23
• Engrossed: 10/31/23
• Refer: 11/1/23
• Report Pass: 11/8/23
• Refer: 11/8/23
• Enrolled: 11/9/23
• Chaptered: 4/9/24
• Passed: 4/9/24

Caption

Taxation: hotel-motel; local units to levy a hotel tax; allow and increase rate allowed to be levied by counties. Amends title & secs. 1, 2, 3, 4, 6 & 7 of 1974 PA 263 (MCL 141.861 et seq.) & adds sec. 2a.

Impact

The passage of HB 5048 specifically targets the financing of local tourism initiatives and convention facilities, promoting economic activity in regions that cater to transient visitors. The revenues generated from the excise tax are earmarked for the development, upkeep, and operational costs of these facilities. The bill also facilitates local control over the imposition of taxes, allowing communities to address their specific economic needs in tourism and hospitality sectors effectively. Furthermore, it lays out a framework for the administration of the tax, including penalties for delinquency and the rights of local governing bodies to amend or repeal their tax ordinances.

Summary

House Bill 5048 allows counties and local units of government in Michigan to impose and collect an excise tax on businesses providing lodging to transient guests. The bill amends existing tax law to empower certain counties, particularly those with populations under 600,000 coupled with cities of at least 40,000 inhabitants, to enact ordinances for taxation. This excise tax can be levied at a maximum rate of 8% of the lodging charge and aims to create a dedicated funding stream for the maintenance and development of tourism infrastructure, including convention and entertainment facilities.

Sentiment

There appears to be a mix of support and opposition surrounding HB 5048. Advocates highlight the potential for increased revenue that can be reinvested in local infrastructure projects and tourism management, which can ultimately boost the local economy. Critics may argue against introducing additional taxes on businesses already facing regulatory challenges, fearing it could deter investment in the hospitality sector. However, the sentiment is generally favorable among communities interested in enhancing their tourism capabilities and supporting local economic development.

Contention

Notable points of contention around the bill include the balance between the benefits of increased local funding for tourism and the financial burden it may impose on hotel and lodging operators. The allowance for counties to collect excise taxes poses questions regarding fairness, as not all regions will have the capability to impose such taxes due to differing demographic circumstances. Additionally, the stipulation that any tax increase must be approved by local voters adds a layer of complexity, potentially leading to disputes over tax policy and local governance.