LRB-2963/1
MES:jld:ph
2013 - 2014 LEGISLATURE
September 23, 2013 - Introduced by Representatives Bies, Ballweg, Brooks,
Clark, Genrich, Kleefisch, Mursau, Murtha, A. Ott, Petersen, Swearingen
and Thiesfeldt, cosponsored by Senators Olsen,
Cowles, Gudex, Hansen,
Harsdorf, Lasee, Lehman and Tiffany. Referred to Committee on Tourism.
AB385,1,5
1An Act to amend 66.0615 (1) (a), 66.0615 (1) (f), 66.0615 (1) (fm) (intro.), 66.0615
2(1m) (a), 66.0615 (1m) (c) 1., 66.0615 (1m) (c) 2. a., 66.0615 (1m) (d) 1., 66.0615
3(1m) (d) 2., 66.0615 (1m) (d) 3. and 66.0615 (1m) (d) 7.; and
to create 66.0615
4(1) (fi), 66.0615 (1m) (d) 8., 66.0615 (1m) (d) 9., 66.0615 (1m) (dm) and 66.0615
5(4) and (5) of the statutes;
relating to: changes to the local room tax.
Analysis by the Legislative Reference Bureau
Under current law, a city, village, or town (municipality) and a local exposition
district may impose a room tax. The room tax is a tax on the privilege of furnishing,
at retail, rooms or lodging to transients by hotelkeepers, motel operators, and other
persons who furnish accommodations that are available to the public, irrespective
of whether membership is required for use of the accommodations.
Generally, the maximum room tax that a municipality may impose is 8 percent.
A single municipality that imposes a room tax may create a commission, which is
defined as an entity to coordinate tourism promotion and tourism development
(tourism). If two or more municipalities in a zone impose a room tax, they must
create a commission. Current law defines a zone as an area made up of two or more
municipalities that, those municipalities agree, is a single destination as perceived
by the traveling public.
Current law requires a commission to contract with an organization to provide
staff, development, or promotional services for the tourism industry in a
municipality if a tourism entity does not exist in that municipality. A tourism entity
is defined under current law as a nonprofit organization that existed before January
1, 1992, and provides staff, development, or promotional services for the tourism
industry in a municipality. The bill changes the definition of tourism entity to be a
nonprofit organization that spends at least 51 percent of its revenue on tourism
promotion and development and provides destination marketing staff and services
for the tourism industry in a municipality. Also, under the bill, a tourism entity must
have come into existence before January 1, 2013, unless such an entity does not exist
in the municipality on January 1, 2013.
Under the bill, the majority of the members of a commission, and the majority
of the members of the governing body of a tourism entity that spends between 51
percent and 70 percent of its revenue on tourism promotion and tourism
development, must be owners or operators of restaurants, tourist attractions, or
lodging facilities that collect the room tax and that are located in the municipality
for which the room tax is collected, except that this membership requirement for a
tourism entity does not generally apply to an entity that receives room tax revenue
solely under contract with a commission. Also under the bill, the governing body of
a tourism entity must include at least one owner or operator of a lodging facility in
the municipality for which the room tax is collected.
Under current law, a municipality that first imposes a room tax after May 13,
1994, must spend at least 70 percent of the amount collected on tourism; the
expenditure may be spent directly by the municipality or forwarded to the
commission for its municipality or zone. The 30 percent or less of the room tax
revenue that is not spent on tourism may be retained by the municipality and used
for any other purpose. If a municipality collected a room tax on May 13, 1994, it may
retain up to the same percentage of the room tax that it retained on that date, even
if that percentage is more than 30 percent.
Under this bill, any revenue that is not retained by the municipality must be
forwarded to a tourism entity or a commission, although the person collecting the
room tax may retain 3 percent of the tax collected, or a higher percentage if
authorized by the municipality, to cover the person's processing fees if the person
pays the tax to the municipality as prescribed by the municipality. Also under the
bill, a municipality that retains more than 30 percent of the room tax must reduce
the amount that it retains to no more than 30 percent. The reduction must be made
in equal amounts over a six-year period beginning on January 1, 2015.
The bill requires municipalities annually to certify and report to the
Department of Revenue (DOR) the amount of room tax revenue collected, and the
room tax rate imposed, by the municipality in the previous year as well as a detailed
accounting of amounts that were forwarded to a commission or tourism entity and
such an accounting for amounts of at least $1,000 expended by a commission or
tourism entity. DOR is required to collect the reports and make them available to
the public. In addition, the report must identify the members of a commission or
tourism entity, and their business or employment affiliation, if any.
This bill authorizes a tourism entity or tourism organization to file a written
complaint with a municipality alleging that the municipality is not allocating or
using room tax revenue as required by the statutes. A municipality that receives
such a complaint must reply in writing within 60 days of receipt of the complaint.
If the complainant is unsatisfied by the reply, or if the municipality fails to reply,
the complainant may submit to the municipality a written request for mediation. If
both parties agree to mediation, they may jointly choose the mediator or agree that
one party shall pick the mediator. The cost of the mediator is paid by the party that
picks the mediator or, if the parties jointly pick the mediator, the municipality pays
if the mediator finds that the municipality is not complying with the room tax statute
and the complainant pays if the mediator finds that the municipality is in
compliance. If the mediator is unable to determine compliance, the parties split the
cost of mediation.
The mediator must provide both parties with a written decision on the
allegations alleged in the complaint within 60 days of the end of the mediation. If
the mediator finds that the municipality is not complying with the room tax statute,
he or she must recommend actions the municipality may take to be in compliance.
The mediator's decision and findings are not binding on the parties.
If the parties follow the mediator's decision, the complainant may not file suit
against the municipality alleging the same issues raised in the complaint during the
municipality's fiscal year in which the decision is provided to the parties. If the
municipality does not agree to mediation, or does not follow the mediator's
recommendations on how to comply with the room tax statute, the complainant may
file a suit against the municipality to enforce compliance with the room tax statute.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB385,1
1Section
1. 66.0615 (1) (a) of the statutes is amended to read:
AB385,3,42
66.0615
(1) (a) "Commission" means an entity created by one municipality or
3by 2 or more municipalities in a zone, to coordinate tourism promotion and
tourism 4development for the zone.
AB385,2
5Section
2. 66.0615 (1) (f) of the statutes is amended to read:
AB385,4,36
66.0615
(1) (f) "Tourism entity" means a nonprofit organization that came into
7existence before January 1,
1992, and provides staff, development or promotional 82013, spends at least 51 percent of its revenues on tourism promotion and tourism
9development, and provides destination marketing staff and services for the tourism
1industry in a municipality
, except that if no such organization exists in a
2municipality on January 1, 2013, a municipality may contract with such an
3organization if one is created in the municipality.
AB385,3
4Section
3. 66.0615 (1) (fi) of the statutes is created to read:
AB385,4,65
66.0615
(1) (fi) "Tourism organization" means a statewide organization that
6represents any of the following:
AB385,4,77
1. Tourism entities.
AB385,4,88
2. The lodging industry.
AB385,4,109
3. An owner or operator, or a group of owners or operators, of a lodging facility
10that collects a room tax.
AB385,4,1111
4. Tourism businesses.
AB385,4
12Section
4. 66.0615 (1) (fm) (intro.) of the statutes is amended to read:
AB385,4,1913
66.0615
(1) (fm) (intro.) "Tourism promotion and
tourism development" means
14any of the following that are significantly used by transient tourists and reasonably
15likely to generate paid overnight stays at more than one establishment on which a
16tax under sub. (1m) (a) may be imposed, that are owned by different persons and
17located within a municipality in which a tax under this section is in effect; or, if the
18municipality has only one such establishment, reasonably likely to generate paid
19overnight stays in that establishment:
AB385,5,1622
66.0615
(1m) (a) The governing body of a municipality may enact an ordinance,
23and a district, under par. (e), may adopt a resolution, imposing a tax on the privilege
24of furnishing, at retail, except sales for resale, rooms or lodging to transients by
25hotelkeepers, motel operators and other persons furnishing accommodations that
1are available to the public, irrespective of whether membership is required for use
2of the accommodations. A tax imposed under this paragraph may be collected from
3the consumer or user, but may not be imposed on sales to the federal government and
4persons listed under s. 77.54 (9a). A tax imposed under this paragraph by a
5municipality shall be paid to the municipality
within a time frame prescribed by the
6municipality and
may, with regard to any tax revenue that may not be retained by
7the municipality, shall be forwarded to a
tourism entity or a commission if one is
8created under par. (c), as provided in par. (d)
, except that before the person collecting
9the tax pays it to the municipality within the time frame prescribed by the
10municipality, the person may retain 3 percent of the tax collected, or a higher
11percentage if the municipality has a higher percentage in effect on the effective date
12of this paragraph .... [LRB inserts date], to cover the person's processing costs.
13Except as provided in par. (am), a tax imposed under this paragraph by a
14municipality may not exceed 8%. Except as provided in par. (am), if a tax greater
15than 8% under this paragraph is in effect on May 13, 1994, the municipality
16imposing the tax shall reduce the tax to 8%, effective on June 1, 1994.
AB385,6
17Section
6. 66.0615 (1m) (c) 1. of the statutes is amended to read:
AB385,5,2418
66.0615
(1m) (c) 1. If a commission is created by a single municipality, the
19commission shall consist of 4 to 6 members.
One
At least one of the commission
20members shall represent the Wisconsin hotel and motel industry. Members shall be
21appointed under subd. 3.
A majority of the members of a commission shall be owners
22or operators of restaurants, tourist attractions, or lodging facilities that collect the
23room tax described in this section, and that are located in the municipality for which
24the room tax is collected.
AB385,7
25Section
7. 66.0615 (1m) (c) 2. a. of the statutes is amended to read:
AB385,6,10
166.0615
(1m) (c) 2. a. If the commission is created by more than one
2municipality in a zone, the commission shall consist of 3 members from each
3municipality in which annual tax collections exceed $1,000,000, 2 members from
4each municipality in which annual tax collections exceed $300,000 but are not more
5than $1,000,000 and one member from each municipality in which annual tax
6collections are $300,000 or less.
A majority of the members of a commission shall be
7owners or operators of restaurants, tourist attractions, or lodging facilities that
8collect the room tax described in this section and that are located in the
9municipalities for which the room tax is collected. Except as provided in subd. 2. b.,
10members shall be appointed under subd. 3.
AB385,8
11Section
8. 66.0615 (1m) (d) 1. of the statutes is amended to read:
AB385,6,1812
66.0615
(1m) (d) 1. A municipality that first imposes a room tax under par. (a)
13after May 13, 1994, shall spend at least 70% of the amount collected on tourism
14promotion and
tourism development. Any amount of room tax collected that must
15be spent on tourism promotion and
tourism development shall either be
spent
16directly by the municipality on tourism promotion and development or shall be 17forwarded to the commission for its municipality or zone if the municipality has
18created a commission
, or forwarded to a tourism entity.
AB385,9
19Section
9. 66.0615 (1m) (d) 2. of the statutes is amended to read:
AB385,7,720
66.0615
(1m) (d) 2.
If Subject to par. (dm), if a municipality collects a room tax
21on May 13, 1994, it may retain not more than the same percentage of the room tax
22that it retains on May 13, 1994. If a municipality that collects a room tax on May 1,
231994, increases its room tax after May 1, 1994, the municipality may retain not more
24than the same percentage of the room tax that it retains on May 1, 1994, except that
25if the municipality is not exempt under par. (am) from the maximum tax that may
1be imposed under par. (a), the municipality shall spend at least 70% of the increased
2amount of room tax that it begins collecting after May 1, 1994, on tourism promotion
3and
tourism development. Any amount of room tax collected that must be spent on
4tourism promotion and
tourism development shall either be
spent directly by the
5municipality on tourism promotion and development or shall be forwarded to the
6commission for its municipality or zone if the municipality has created a commission
,
7or forwarded to a tourism entity.
AB385,10
8Section
10. 66.0615 (1m) (d) 3. of the statutes is amended to read:
AB385,7,119
66.0615
(1m) (d) 3. A commission shall use the room tax revenue that it
10receives from a municipality for tourism promotion and
tourism development in the
11zone or in the municipality.
AB385,11
12Section
11. 66.0615 (1m) (d) 7. of the statutes is amended to read:
AB385,7,1713
66.0615
(1m) (d) 7. Notwithstanding the provisions of subds. 1. and 2., any
14amount of room tax revenue that a municipality described under s. 77.994 (3) is
15required to spend on tourism promotion and
tourism development shall be forwarded
16to, and spent by, the municipality's tourism entity, unless the municipality creates
17a commission and forwards the revenue to the commission.
AB385,12
18Section
12. 66.0615 (1m) (d) 8. of the statutes is created to read:
AB385,7,2219
66.0615
(1m) (d) 8. The governing body of a tourism entity shall include at least
20one owner or operator of a lodging facility that collects the room tax described in this
21section and that is located in the municipality for which the room tax is collected.
22Subdivision 4., as it applies to a commission, applies to a tourism entity.
AB385,13
23Section
13. 66.0615 (1m) (d) 9. of the statutes is created to read:
AB385,8,624
66.0615
(1m) (d) 9. With regard to a tourism entity that spends at least 51
25percent, but not more than 70 percent, of its revenues on tourism promotion and
1tourism development, a majority of the members of the tourism entity's governing
2body shall be owners or operators of restaurants, tourism attractions, or lodging
3facilities which collect the room tax described in this section, and which are located
4in the municipality for which the room tax is collected. This subdivision does not
5apply to a tourism entity that receives room tax revenue solely under contract with
6a commission under par. (b).
AB385,14
7Section
14. 66.0615 (1m) (dm) of the statutes is created to read:
AB385,8,168
66.0615
(1m) (dm) Beginning with the room tax collected on January 1, 2015,
9by a municipality that collected a room tax on May 13, 1994, as described in par. (d)
102., and retained more than 30 percent of the room tax collected for purposes other
11than tourism promotion and tourism development, such a municipality shall reduce
12the amount retained that exceeds 30 percent by one-sixth on January 1, 2015,
13January 1, 2016, January 1, 2017, January 1, 2018, January 1, 2019, and January
141, 2020, so that on and after January 1, 2020, the municipality retains not more than
1530 percent of the room tax collected for purposes other than tourism promotion and
16tourism development.
AB385,15
17Section
15. 66.0615 (4) and (5) of the statutes are created to read: