Embed Size (px)
Citation preview
#GaGTC15
Accommodations Tax 101
Eric Lopez, DCA
DCA’s Role
o Not the Hotel-Motel Policeo DCA’s Legislative Mandate:
Provide Reporting System for local governments
Track reporting complianceo Assist local governments with excerpts
from the state laws; but not “interpret” gray areas.
o Assist local governments by reminding of reports due and explaining reporting requirements
MAIN DISCUSSION TOPICS
o Government’s Right to Impose a Tax
o Planning and Decision-making
o Collecting the Tax
o Spending the Restricted Tax Dollars
o After the Money is Spent
o Questions and Answers
Right and Authority to Tax
O.C.G.A. 48-13-6 - Businesses subject to tax
Authorizes all Local Governments to classify businesses and professional practitioners, and to assess different taxes on different classes of businesses and professions
O.C.G.A. 48-13-51 (a)&(b) - AUTHORIZATIONSto impose a specific local Hotel-Motel tax rate
The specific Authorization Paragraphs identify your government’s legal right to impose the Hotel-Motel tax at a specified rate!
Three Main Authorizationsfor First-time Taxation
In 2008, H.B. 1168 reduced the number of permissible options from twenty-four (24) to three (3) Authorization Paragraphs:
48-13-51-(a)(1) – the basic 1% to 3% Tax option
48-13-51 (a)(3) – the 5% Tax option 48-13-51(b) – the 6% to 8% Tax option **
** requires an act passed by the General Assembly.
Synopsis of authorization spending restrictions is on the
DCA website
o A 4-page list of all authorization paragraphs and their spending restrictions is available on our website at:
http://www.dca.ga.gov/development/research/programs/hotelmoteltax.asp
o It is located on the Hotel/Motel Tax Report page under the heading “Additional Information”, then click on the link “Synopsis”
Tourism Promotion
All Authorizations require a minimum
percentage of total revenue be expended for promoting:
Tourism, Conventions, and Trade Shows (“TCT”)
What does that mean?
O.C.G.A. 48-13-50.2(4) defines TCT as:Planning, conducting, or participating in programs of information and publicity designed to attract or advertise tourism, conventions, or trade shows.
Lodging Business
48-13-51(a)(1)(A)
Local governments may levy and collect an excise tax from any entity furnishing lodging:
o To the public;
o That is licensed by, or required to pay business or occupation taxes to, the local government;
o Where accommodations are regularly furnished for value.
Service Providers
A Hotel-Motel Tax Authorization may allow or requirea contract with one or more of the following entities to provide Tourism promotion:o A Private Sector Nonprofit Organization, or “DMO”o The State, a Department of State Government, or a
State Authorityo A CVB Authority created by General Assembly o A Recreation Authority created by General Assemblyo Any Municipal or County Government (for TPD only)*
What is a Private Sector Nonprofit Entity?
O.C.G.A. 48-13-50.2(3)
Private Sector Nonprofit is defined as:o A chamber of commerce, convention
and visitors bureau, regional travel association, or any other private group organized for similar purposes which is exempt from federal income tax under Section 501(c)(6) of the Internal Revenue Code of 1986;
o The primary responsibilities of which are toencourage travelers to visit {promote tourism}
Budget Required
O.C.G.A. 48-13-51
o Local governments must adopt a tax budget plan
specifying
how restricted funds will be expended
o When contracting with other entities, the local
government must
require them to provide an expenditure budget o Contractor budgets (CVBs, Chambers, etc.) must be
incorporated into local government’s tax budget plan
Involve All the Players
o CITY/COUNTY COUNCIL MEMBERS
o CFO/CPA FIRM
o LEGAL COUNSEL
o REGIONAL COMMISSION
o SERVICE PROVIDERS (DMO/TPD CONTRACTORS)
o YOUR LODGING ENTITIES
Tax Documentation
An Excise Tax Ordinance is required to collect any tax at all.
o Ordinance must include: Tax authorization and tax rate Effective date and specific processes
o You must also file your Ordinance with DCA, and it is to your advantage to also include:o Budgets and scheduleso Contractor agreementso Auditing procedures
What is Taxable?
YES…o Total fees charged for lodging, including
special serviceso Lodging stays up to 30 consecutive days
NO…o Victims displaced by a natural disastero Georgia state or local government officials with
exemption form or State issued credit card
Lodging Entity Records
O.C.G.A. 48-13-53.4
Each innkeeper is required to file a return and pay taxes to the local taxing jurisdiction under this article and must keep:
oSuitable records of the charges taxable under this article;
and,
oAny other books of account which are necessary to determine the amount of tax due.
GMA’s Revenue Recovery Service
Administration of Hotel Tax
o Collection of payments from Lodging Providers
o Follow up on any late payments
o Enhanced reporting and information on local lodging market
o Review of returns each month to determine trends for possible audits as needed
Contact: Lou Comer: (678) 686-6260
Spending Restrictions
Generally, the:
oThe first 3 Pennies of tax revenue is NOT restricted, except for 51(a)(1), under certain circumstances.oPennies 4 thru 8, of tax revenue are restricted in some manner depending on the authorization paragraph administered.
Special Note on State Parks
o Authorization Paragraphs which specifically provide for imposing the tax on State Park lodging facilities also require that 100% of the revenue from those State Parks be spent on promoting the State Park.
o None of the State Park tax revenue accrues to the taxing government’s general fund!
5%+ Spending Restrictions
How many pennies are restricted?
o 2 pennies out of 5 (40% of total tax dollars)
o 3 pennies out of 6 (50% of total tax dollars)
o 4 pennies out of 7 (57.14% of total tax dollars)
o 5 pennies out of 8 (62.5% of total tax dollars)
Collection Authorization 51(b)
House Bill 1168 (2008)
o Phased out most 51(a) authorizations allowing only 3 options for new taxes.
o Provided new authorization paragraph 51(b) for tax rates from 6% to 8%,with a specific selection process for that option.
o Added special spending restrictions for the new 51(b) authorization.
51(b) Spending Restrictions
Authorization 51(b) provides for tax rates of 6% to 8%
o Up to 100%, BUT at least 50% of the 6th penny, 7th penny, and/or 8th penny of tax must be expended for promoting tourism by a private Destination Marketing Organization (“DMO”)
o The Remainder of the 6th penny, 7th penny, and/or 8th penny of tax that is not expended to promote tourism must be expended on Tourism Product Development (“TPD”)
So…what is “TPD”
O.C.G.A. 48-13-50.2(1)
o “Tourism Product Development” means:
o The expenditure of funds for the creation or expansion of physical attractions which are:
o Available and open to the publico Improve destination appeal to visitors, o Are used by and support the visitor’s experience.
TPD Project Requirements
Some requirements exist for the use of “TPD” funds under authorization 51(b):
o The Project must be identified AS Tourism Product Development in the annual budget;
o The Project must involve physical renovation of an existing tourism facility or construction of a new tourism facility;
o Tax revenues utilized should be expended directly by the local government, or an entity other than the contracted tourism promotion organization (DMO)
51(b) Selection
How do we move to the 51(b) Authorization?
1) Local government must adopt a resolution which: o Specifies the tax rate (6%, 7% or 8%); ando Identify the tourism projects and/or tourism product
development purposes; ando How proceeds will be allocated.
2) A Local Act by the General Assembly must be passed.
3) Create a new Ordinance – submit a copy to DCA
DCA Reporting
O.C.G.A. 48-13-56
o Each city and county as a condition of continuing authorization to impose the tax, must file a Hotel Motel Tax Report with DCA annually, within 180 days of the end of their fiscal year.
o The Report must be filed on the specific form associated with the government’s tax authorization paragraph.
Hotel Motel Tax Help
NEED HELP?
Go to the following link to access report forms, read sample ordinances, view other instructions and past
yearreports:
http://www.dca.ga.gov/development/research/programs/hotelmoteltax.asp
…or ask us for an individual “Status Report” on your government’s reporting compliance.
Jonathan Sharpe Eric Lopez Manager, Research Program Coordinator
(404) 679-4996 (404) [email protected] [email protected]
