ACT 18 OF 2016 Hotel Room Tax Legislation

ACT 18 OF 2016 Hotel Room Tax Legislation Update

History of Tourism Promotion in Centre County ■ January 8, 1963 – Board of Commissioners designated the “Centre County Vacation Land Council” aka Central Pennsylvania Convention & Visitors Bureau (CPCVB) as Centre County’s Tourism Promotion Agency (TPA) ■ Tourism Industry Spending: “direct value of the goods and services purchased by travelers and, as such, exclude capital investment and general government support of travel and tourism” – 2005: $498. 7 M – 2014: $720. 4 M 2014 (Lodging - $125, 100, 000) SOURCE: Economic Impact of Pennsylvania’s Travel and Tourism Industry Report visitpa. com/articles/economic-impact-travel-report

Hotel Room Tax Rate in Centre County ■ Effective September 1, 1997 – the Board of Commissioners approved a 1% hotel room tax rate ■ Effective July 1, 2002 – increased to 2. 5% – CPCVB Board creates a tourism grant program and forms the Tourism Grant Review Committee ■ 20% of tax revenue (minus admin fees) are set aside in a Tourism Grant Program account. ■ 2016 grant awards: $341, 638.

From Legislation to Law ■ HB 794 introduced on March 13, 2015 – Re-introduction of HB 2515 from 2013 -2014 Session ■ All 5 Centre County legislators supported HB 794 – April 11, 2016 – Passes PA Senate 43 -6 – April 12, 2016 – Passes PA House 138 -57 ■ April 20, 2016 – Signed by Governor Wolf

Act 18 of 2016 – Changes ■ Increases the ceiling of optional hotel room tax rate from 3% to 5%. ■ Keeps tourism marketing, promotion spending, projects, and grants as allowed uses of hotel room tax ■ Adds a general category of tourism expenditures provided they: – Are “deemed necessary” by the recognized TPA – Do not compete with the private sector tourism or travel efforts ■ Requires any grants to have a cash or in-kind match of 25% ■ Adds cabins on campgrounds located. SOURCE: on State land or private HB 794 Fiscal Note: property to the definition of hotel bit. ly/hb 794 fn

Explicitly Excluded from Tax: Yurts & Walled Tents IMAGE SOURCE: pjrider. com/Grange. Fair. Tents. jpg

Act 18 of 2016 – Changes ■ New Audit/Financial Statement requirements – 90 days after the end of the TPA’s fiscal year the County may withhold tax revenue collected – 120 days after the end of the TPA’s fiscal year the secretary of DCED may require the County to withhold tax revenue collected ■ Establishing an optional county administrative fee of up to 4% deducted from the revenue to cover the costs of collection – 1997 Ordinance: $3, 500 – 2002 Ordinance: the lesser of 2% or $40, 000 (adjusted biannually with the percentage growth of CPI for All Urban Consumers) SOURCE: HB 794 Fiscal Note: bit. ly/hb 794 fn

Collection and Distribution ■ Centre County Treasurer’s Office receives tax from hotels. No later than 60 days after receipt the funds are sent to the CPCVB, less the 2% admin fee. – In 2015, the Treasurer’s Office collected $1, 843, 172 in Hotel Room Tax & $1, 806, 309 Transferred to CPCVB (less $36, 863 for admin fee) ■ 80% of the net Hotel Room Tax goes towards the operations budget and marketing budget of the CPCVB ■ 20% of the net Hotel Room Tax are transferred to a dedicated “Tourism Grant Program” account ■ Each March/April the Tourism Grant Review Committee meets to select the recipients of the grants ■ Each May the recipients are announced.

Collection and Distribution ■ Centre County Treasurer’s Office receives tax from hotels. ■ No later than 60 days after receipt the funds are sent to the CPCVB, less the 2% admin fee. – In 2015, the Treasurer’s Office: ■ Collected $1, 843, 172 in Hotel Room Tax ■ Transferred $1, 806, 309 to CPCVB (less $36, 863 for admin fee)

Going forward ■ Updated Ordinance (no sooner than 1/1/17) – Add to definition of hotel the language regarding Cabins – Include new language re: Audit/Financial Statement – Change in Administrative Fee – Change in Hotel Room Tax Rate ■ Discussions with CPCVB at upcoming