Michigan Senate Bill SB0672

Michigan 2023-2024 Regular Session

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

Caption

Taxation: hotel-motel; hotel tax; modify. Amends sec. 5 of 1974 PA 263 (MCL 141.865) & adds sec. 2b. TIE BAR WITH: SB 0671'23

Impact

If enacted, SB 0672 could significantly impact local governments and the hospitality industry. Cities near international airports would have the authority to generate additional revenue through this excise tax, which could be reinvested into local services, infrastructure, or tourism-related initiatives. The ability to levy this tax could enhance funding for public services in cities that rely on tourism to bolster their local economies. However, it remains to be seen how this additional tax will affect lodging prices and overall competition within the hospitality sector.

Summary

Senate Bill 0672 proposes an amendment to the 1974 PA 263, which allows counties to impose and collect an excise tax from entities providing lodging accommodations to transient guests in cities housing an international airport. The bill specifically introduces Section 2b, stipulating that city boards may levy such taxes at a maximum rate of 3% on the total charges for accommodations offered to guests. Importantly, the implementation of this tax requires prior approval from the city’s electorate, ensuring local voters have a voice in the decision-making process regarding the tax levy.

Contention

Debate surrounding SB 0672 may arise concerning the implications of local taxation authority and its effects on businesses. Proponents argue that the bill equips cities with necessary financial tools to better support local communities, while opponents may raise concerns about the potential burdens placed on transient guests and the hospitality industry. There is also the underlying question of whether such tax levies could make cities less attractive to tourists if accommodation prices increase as a result.