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JLARC Provides More Information on Lodging Tax Reporting Requirements


November 5, 2013 by Judy Cox
Category: Lodging Tax (Hotel-Motel Tax)

JLARC Provides More Information on Lodging Tax Reporting Requirements

The Joint Legislative and Review Committee (JLARC) has on its website regarding reporting requirements for the lodging tax under ESHB 1253, passed by the legislature during the 2013 session.  If you click on the link that says “linked here in pdf format,” you will find a letter, addressing outstanding issues, that Keenan Konopaski, Legislative Auditor  of JLARC, sent to Victoria Lincoln of the Association of Washington Cities (AWC) and Josh Weiss of the Washington State Association of Counties (WSAC).

Here are the main points regarding the reporting process being developed by JLARC:

No reports need to be filed for 2013 expenditures. Many municipalities (cities, counties, and public facility districts) made awards for 2013 before the effective date of the new legislation – July 1, 2013 – and contracts for those awards would not be included in the new reporting requirements.   However, in consultation with the legislative legal staff, JLARC has determined that even awards made after the effective date of the legislation do not need to be reported for 2013.

Reports for 2014 expenditures will be due in the March or April 2015.  JLRAC will be providing a new, web-based reporting form instead of using an Excel format.  They got lots of feedback on the draft form they send out a couple months ago, and it wasn’t favorable.

Municipalities must apply to the lodging tax advisory committee (LTAC) for their own proposed uses of the lodging tax revenues.  While JLARC stated that it will not be auditing compliance with lodging tax application requirements,  it quotes a State Auditor’s Office determination as saying:
The amendments to RCW 67.28.1816 require applicants, including municipalities, to submit an application to the Lodging Tax Advisory Committee.

(My emphasis.) So, while the statutory language may not be clear on this point and subject to contrary interpretation, the State Auditor’s Office has staked out its position.

Note, however, that some municipalities with a population of 5,000 or less have voluntarily formed advisory committees. They can set whatever rules they want for how that committee functions.

Also, note that, in its July 2013 fact sheet, “Lodging Taxes: Beyond the Sunset, ”AWC points out that a municipality does not need to submit an application for lodging tax uses that are tied to ongoing contracts or bond obligations.

Making attendance estimates.  JLARC reminds municipalities that ESHB 1253 requires  municipalities to obtain, during the application process, estimates of the expected increases in three specific categories of travelers as well as “actual” attendance figures for those same categories after the spending takes place.  Just as a reminder, those categories as listed by JLARC are:
  • Staying overnight in paid accommodations away from their place of residence or business;
  • Staying overnight in unpaid accommodations (e.g., with friends and family) and traveling more than 50 miles;
  • Staying for the day only and traveling more than 50 miles.

Realizing that actual counts of attendance are not realistic, JLARC says a good faith best-estimate will suffice.   (Emphasis added by JLARC.)  These estimates should be reported by the applicants, along with the methodologies used, to the municipality providing the funding. 

JLARC says nothing about how municipalities should deal with the impracticality of getting the estimates of the expected increases for each traveler category before the events takes place.   If the applicant has put on a similar event in the past, it may be able to make estimates based on that history.  Otherwise, all we can advise is that you make “good faith best-estimates” in this situation also. 

MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

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