CHEYENNE — What was initially billed as a “tourism tax” morphed into a leisure and hospitality tax at the Joint Interim Revenue Committee meeting here on Tuesday. Why? Because it doesn’t just tax tourism. It never did, really.
First proposed in September by the travel industry itself, the bill would impose a 1 percent sales tax on a host of businesses that cater at least in part to tourists. The bill is intended to ensure a dedicated source of funding for the state tourism office by taxing tourists themselves in the places they are likely to be spending money.
Some of these are obvious — museums and RV parks, for example — but most are not. The tax would also target restaurants, bars and sporting events.
BUFFALO — The Wyoming tourism industry says it wants to tax itself in order to cover the cost of promoting the Cowboy State to visitors around…
“Go to a bar in northeast Wyoming or south-central Wyoming and try asking some roughnecks if they’d be OK paying another 1 percent tax on their beer and nachos,” Mike Moser, executive director of the Wyoming State Liquor Association, told lawmakers. “If you do ask them that I would recommend wearing running shoes and keeping your car door unlocked.”
The committee agreed to strip the measure of its “tourism” label at the behest of revenue department director Dan Noble who said that after consulting with colleagues in South Dakota, which already has a similar tax, he learned that many residents there were angry to find themselves paying a tax supposedly meant to target out-of-towners.
So was born the “leisure and hospitality tax.”
“I realize it’s semantics,” Noble said. “But the fact is if it avoids having a huge amount of phone traffic associated with it, it might be better calling it something else.”
Wyoming Tourism Office Executive Director Diane Shober said that about 80 percent all of travel-related spending in Wyoming — including fuel and other sales not included in the proposed tax — comes from out-of-state visitors.
The tax would generate between roughly $16 million and $18 million to be spent on tourism promotion each year, depending on how much sales tax is collected.
Neighboring states like Montana and Colorado currently spend nearly twice as much as Wyoming does on tourism promotion.
Novelist C.J. Box, who sits on the state tourism board, said that the tax would allow Wyoming to properly compete for Mountain West visitors.
“Wyoming — by far in comparison to our surrounding states — has the best tourism product,” Box said. “But ... the budget for Wyoming tourism has fallen behind every other competitor because every other state has a dedicated funding mechanisms while we do not.”
Tourism efforts are currently appropriated out of the state’s general fund. Lodging taxes are funneled to county and city travel boards.
As they did in September, the travel industry turned out in force to speak in favor of the tax. John Johnson, who owns a Casper-based restaurant chain, said that many of his establishments are located near hotels and that the more travelers in Wyoming, the better business he does.
“We are very supportive of this leisure and hospitality tax,” he said. “We think it’s the most fair way to spread it across the broadest category and it provides that permanent solution.”
An owner of several Wyoming hotels said she was far more concerned about empty rooms than slightly higher taxes.
The committee amended the measure slightly to clarify where and how the funds were to be deposited into state accounts, but otherwise moved it along to its December meeting, where members will vote on whether to sponsor the bill and recommend that the full Legislature pass it.
Because the revenue committee has been tasked with generating proposals to raise revenue, many of the tax bills it has considered this year are purely speculative as opposed to measures that members genuinely support. However, the lodging and hospitality tax might stand a better chance of being sponsored by the committee and approved by the Legislature.
Senate President Eli Bebout, R-Riverton, a staunch opponent of new taxes despite the state’s $770 million deficit, has indicated he may be open to a tax targeting tourists and its passage would help reduce the budget gap.