CHEYENNE – Despite some pushback, a bill that would implement a 5% sales tax on lodging services in Wyoming gained approval from the House of Representatives during its first reading Thursday.
House Bill 134, the only taxation measure supported by Gov. Mark Gordon, would send three-fifths of that tax revenue to an account that would be used to promote tourism in the state. The remaining two-fifths of the revenue would be distributed proportionately to the counties and cities where it was collected.
Estimates show the tax proposal would add $7.4 million to the tourism account in its first year of implementation, and that annual figure would increase to $14.9 million in each of the next two years.
After passing out of the House Appropriations Committee on Tuesday, the bill spurred about a half-hour of debate on the House floor Thursday afternoon. For some lawmakers, any sort of tax was anathema.
“Our people in Wyoming are hurting, and this is another thing that we want to lay them up with as they travel around the state,” Rep. Garry Piiparinen, R-Evanston, said.
In response, Rep. Bob Nicholas, R-Cheyenne, who co-chairs the Join Appropriations Committee, said he understood Piiparinen’s concerns. But he added the measure would be crucial for the state, which is facing projected revenue shortfall of roughly $200 million in coming years.
“This is one step out of many to help fix our structural deficit. That’s why this is a (Joint Appropriations Committee) bill,” Nicholas said. “Every biennium, this is going to be a minimum of $40 million that will go back to the general fund, and those are dollars that we can take and fix those other incremental expenses we have over time that are ongoing.”
Nicholas also noted 85% of the tax would be paid by out-of-state residents, and that revenue would then allow the state Office of Tourism to better promote the industry and attract more tourists.
Yet, for a few other lawmakers, that tax revenue wouldn’t go to the right places. Rep. Chuck Gray, R-Casper, noted K-12 education was facing the brunt of the deficit, arguing the money from the proposal should go more directly to remedying that funding issue.
“We need to be laser focused on our core deficits, and once again, we see in the draft of this bill a major problem,” said Gray.
Rep. Andy Schwartz, D-Jackson, responded by emphasizing the proposal would free up other funds to be spent on other needs.
“The most important thing we’re talking about here is raising $40 million per biennium that will ultimately be general fund money,” Schwartz said. “That is the core of the issue here.”
Another lawmaker acknowledged Wyoming’s lax tax structure, arguing the lodging tax was a reasonable solution to create some additional revenue for the state.
“The reality in Wyoming, and I think we all know it, is we’re not taxed very much at all,” Rep. Lloyd Larsen, R-Lander, said. “We don’t get taxed on our food, there’s no state income tax, no corporate tax, no professional tax.”
Ultimately, the measure passed fairly comfortably, though it will still need to win two additional votes in the House before moving to the Senate, where it could face a tougher battle. Last year, a similar lodging tax proposal passed the House comfortably before failing in the Senate by a 19-7 vote.