Michigan Senate Bill SB0671

Michigan 2023-2024 Regular Session

• Introduced: 11/9/23
• Refer: 11/9/23

Caption

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

Impact

Under SB0671, counties with a population of less than 600,000 and cities with populations of at least 40,000 are empowered to enact ordinances to levy this tax. Importantly, the bill sets tax rates that local governments can implement—capped at 5% for counties and 3% for cities—thus providing municipalities with a structured framework to enhance their financial resources, particularly in tourism-related initiatives. The revenues from these taxes are earmarked for specific purposes, including the maintenance and development of public facilities, and encouraging tourism, which can significantly impact local economies.

Summary

Senate Bill 671 (SB0671) proposes significant changes to the existing framework governing excise taxes levied by counties and cities in Michigan. Specifically, it amends the 1974 Public Act 263, which allows local jurisdictions to impose taxes on those engaged in providing accommodations to transient guests, defined as individuals staying less than 30 consecutive days. This legislation is designed to streamline authority for counties and cities to generate revenue through excise taxes while ensuring clarity in the definitions and roles outlined in the tax imposition process.

Contention

Despite its potential benefits, SB0671 has faced scrutiny regarding the impacts of local tax authority and the regulation of transient accommodation businesses. Critics argue that while the bill is positioned to boost local revenues, it may also place excessive financial burdens on small businesses involved in hospitality. Furthermore, concerns have been raised about the equity of imposing such taxes and whether they would hinder the growth of local businesses that provide essential services to both residents and visitors. The debate centers on finding a balance between local government interests and the operational adaptability of small enterprises in the hospitality sector.