Taxes
10:40 am
Fri August 2, 2013

PA's Tourism Businesses Want Change in Hotel Room Taxes

Pennsylvania’s tourism businesses want to see a change in the way counties tax hotel room stays and how they use the revenue.

The president of the Pennsylvania Association of Travel and Tourism told state lawmakers at a recent hearing the tax has gone too far afield from its original purpose to generate money to promote tourism.

Rob Fulton said some counties have been too quick to use the funds for other tangential expenses.

"Some taxes are used to pay bonds on convention centers," he said. "In some cases taxes might be used to underwrite the maintenance at a ball field. In some cases, the tax might be used to pave a stretch of road."

Fulton said paving roads and funding convention centers are important, but they fall outside the express purpose of legislation levying local hotel taxes.

"You have varying agreements and varying ways that the monies are spent and as an industry that’s trying to make sure that we have the right dollars, you know, the appropriate dollars to market the state, we just don’t want to continue to see that erosion," he said.

Fulton cited difficulty in keeping up with the growth of local hotel taxes.

The state collects a 6 percent tax on hotel stays. But since local hotel tax rates differ by county, so do the prescribed uses of tax revenue.

Fulton acknowledges there’s an argument the tax rates should be different from county to county as tourism attractions vary, but he says the industry chafes at the variation in how the revenue from those taxes is used.

"If all the monies at the local level went back to tourism and marketing promotion, I think we’d be fine with that," Fulton said. "We wouldn’t be as concerned about the rates but what’s happening is those taxes get divided up in different ways."