Meals, Rooms Tax Revisions

LFDA Editor

In recent years, there have been several attempts to alter the way New Hampshire taxes rooms and meals. 

The 2010 Legislature considered a measure that would have allowed cities and towns to decide for themselves how much to tax meals and rooms. That meant the potential of additional tax on the meals and rooms that the state is already taxing at 9 percent. Local meals and rooms taxes could have helped municipal budgets close spending gaps.  However, opponents feared that additional meals and rooms taxes could hurt tourism across the state. The measure was killed in committee in May 2010.

In the 2013 legislative session, then state Sen. Nancy Stiles (R-Hampton) filed a bill, SB 121, to alter the way the state distributes the rooms and meals tax.

The state currently distributes meals and rooms tax revenues based on each community's population.

Per Stiles' proposal, 56 percent of the tax revenue would still have been distributed based on population, but 44 percent would have been distributed based on the source of the revenue.

SB 121 was ultimately killed on March 14, 2013.

"My goal is to get some more money going back to the communities that raised it," Stiles said at the time she introduced the bill. "There is a cost for them to host tourism."  For example, tourist towns may require larger police forces to manage crowds.

However, a redistribution could significantly hurt the budgets of communities that lack tourism.  Western New Hampshire, for example, generates far less meals and rooms tax revenue than the Seacoast and the North Country, both popular tourist destinations.

In 2015 Stiles sponsored a variation on her 2013 bill, SB 213.  That bill added the distribution of 1% of the net income from the meals and rooms tax to towns and cities in proportion to the amount collected within the town or city.  However, the Senate amended that bill to instead study the formula for distributing meals and rooms tax revenue.

 

LEGISLATIVE HISTORY

Killed in the House

Requires the Department of Revenue Administration to distribute a portion of the revenue collected from occupancies under the meals and rooms tax to towns and cities in proportion to the total amount of such taxes collected in the state.

Passed House

Limits how much municipalities can regulate short-term rentals, and allows a "lodging marketplace" - such as Airbnb - to be licensed by the state to collect meals and rooms taxes on behalf of vacation and short-term rentals.

Signed by Governor

Requires advertisements of short-term rentals to display the meals and rooms license number of the operator. Short-term rentals - for example through Airbnb - are already required to register and pay meals and rooms tax, but many do not.

Signed by Governor

Allows municipalities to regulate short-term rental businesses. An amendment revised the bill to establish a committee to study the effect of short-term rentals on municipalities.

Interim Study

Requires an operator under the meals and rooms tax who rents rooms in a hotel or hotels with more than one physical address under a single license to provide the Department of Revenue Administration with a schedule of the physical address of each hotel.

Interim Study

Requires the Department of Revenue Administration to distribute a portion of meals and rooms tax collected to towns and cities.

Killed in the House

Allows towns and cities to adopt an additional surcharge under the meals and rooms tax on hotel occupancy.

Signed by Governor

Originally written to add the distribution of 1% of the net income from the meals and rooms tax to towns and cities in proportion to the amount collected within such town or city.  The Senate amended the bill to instead establish a committee to study the formula for distribution of meals and rooms tax revenues.

Tabled in the Senate

Permits municipalities to adopt ordinances to assess hotel occupancy fees for the use of municipal services (not to exceed $1 per unit per night).

Killed in the House

Repeals the provision allowing operators to retain 3% of meals and rooms taxes collected. The bill continually appropriates 3% of meals and rooms tax revenues to school building aid. The Department of Revenue Administration estimates this would provide roughly $8 million for school building aid.

Killed in the House

Decreases the meals and rooms tax.

Signed by Governor

Makes administrative changes to the meals and rooms tax, and establishes requirements and procedures for a municipality to calculate and set the applicable tax rates for property taxes.

Killed in the Senate

Distributes meals and rooms tax revenue to municipalities according to how much revenue came from each municipality.

Died in Conference Committee

Makes various regulatory changes, such as allowing towns to adopt a local meals and rooms tax in addition to the state meals and rooms tax and authorizing expanded gambling.

Should NH revise the meals and rooms tax?

FOR
REPRESENTATIVES

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Issue Status

Three pieces of legislation relative to the meals and rooms tax -- two in the House and one in the Senate -- were killed in the 2017 session, having been deemed in committee as being inexpedient to legislate. The House Ways and Means Committee killed HB 534 and HB 539, while the Senate Ways and Means Committee killed SB 182.

The Meals and Rooms Tax remained untouched by legislation in the 2016 session. Measures that would have made some changes were found to be inexpedient to legislate.
 

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