Please use the following resources to make your voice heard within the Hotel & Lodging Industry. Only by working together and staying involved in the legislative process can we secure a strong future for our industry.
IHLA Grassroots Action Center
State of Indiana Website
The Indianapolis Star Citizens Guide
IHLA District Meetings
Join us at an IHLA District Meetings to discuss potential opportunities and threats that may arise at the State House.
Coming soon!
ALERT! CURRENT ISSUE: Hometown Matters
Hometown Matters is currently one of the most talked about issues that will go before the General Assembly in this upcoming session. Introduced last year, it was endorsed by the Governor, but was not discussed as time ran out for it to be considered. Instead, Hometown Matters (as it is called by the Indiana Association of Cities and Towns) was left as a priority in 2007.
As state legislators have reduced and/or limited many local governmentspending options over the past few years, cities and towns in Indiana have been strapped for funding. The ‘Hometown Matters’ bill hands over taxing decisions to local governments. It allows local governments to fund government spending by levying local income taxes, sales taxes, food and beverage taxes and hospitality taxes for their municipality.
Unfortunately – what ‘Hometown Matters’ does for local citizens by leaving taxing decisions to local governments – is raise the possibility that some could be faced with ever-increasing taxes as local governments look to spend more money on projects, rather than curb their spending. Local government could spend a portion of the money raised from additional taxes on property tax relief; but the remaining portion could be spent in any way the local government would choose. There is no set percentage of local funding that would go to property tax relief. Additionally, there is no cap or sunsetting provision on the new taxes – meaning that the tax burden for local Hoosiers throughout Indiana never decreases. The local food and beverage tax rate and or innkeepers taxes adopted in a county would be in addition to all existing innkeeper’s taxes.
IHLA POSITION: (Click here to access this info in a downloadable PDF)
The Indiana Hotel and Lodging Association is opposed to the special taxing provisions in the “Hometown Matters Proposal”. These provisions would allow local government the unchecked power to raise taxes on a single industry and would be bad for business and economic development in our communities. Innkeeper’s taxes should be reserved exclusively for tourism development and promotion.
Unfortunately – ‘Hometown Matters’ raises the real possibility that taxpayers could be faced with ever-increasing taxes as local governments look to spend more money on projects, rather than curb their spending. Local government could spend a portion of the money raised from additional taxes on property tax relief; but the remaining portion could be spent in any way the local government would choose. There is no guarantee that property tax relief would be permanent. Past experience tells us that property taxes would continue to increase over time in addition to the new taxes. The overall tax burden for local Hoosiers throughout Indiana would continue to increase. This is not tax relief.
IHLA TALKING POINTS:
An increase in lodging taxes will be paid by both hotel guests and hoteliers.
IHLA members know that while guests will pay the tax, hotels and their employees will also pay the cost of the tax increase in reduced sales or lower negotiated rates.
The lodging industry in Indiana needs help not harm.
Innkeepers taxes: (12.4% in Indiana and 15% in Indianapolis) vs. (12.5% the national average) Average room rates: ($67.60 in Indiana) vs. ($83.26 the national average) Average occupancy rates: (52.3% in Indiana) vs. (58.7% the national average)
There is a community cost involved in lost room nights.
Retail sales will suffer. If a hotel loses one night of lodging to another locality, the community also loses one day of guest spending for transportation, meals, amusement, and shopping. For every $1 spent by a hotel guest for lodging in Indiana an additional $3.80 is spent in the local community.
Employees will lose pay. If a hotel loses one room night- the doorman gets one less tip and the maid gets one less room to clean. A lost convention is a significant cost to these employees.
Lodging taxes are not efficient funding tools for local government.
A 2% increase in the room tax would cost the nation 317,112 jobs, $8,538 million in wages and $26,994 million in sales. Meanwhile the resulting gain in net revenue from the higher tax would be less than one-half of the tax increase. Econometric analysis reveals that on average a 2.0% increase in the combined tax on hotel rooms (increasing the rate from 12.4% to 14.4%, for example) will cause about a 2.4% reduction in room sales and associated visitor spending per year. The room tax increase would raise an additional $1,869 million from hotel guests but cause the loss of $990.5 million in other local state and local taxes paid by all industries and workers affected by reduced visitor spending.
Local government does not always act in its own best interest.
The state recognizes the tourism industry as an important economic tool. It spends advertising dollars to attract visitors to Indiana. It controls the innkeeper’s tax through the General Assembly to insure its judicious application. Local officials have told us they know using this kind of tax for general revenue purposes is not fair but they “just need the money”. The claim of a need for revenue at the local level should not be used to justify bad tax policy.
RESOURCES:
Outline of the Bill:
http://www.citiesandtowns.org/content/Hometown/FactSheet.pdf
Other Interesting Links:
IACT's "Hometown Matters" Creates Hometown Masters
1 percent tax could be coming: Officials look for new ways to generate money
State officials support Hometown Matters
'Hometown Matters' proffered as possible property tax solution
www.stoptaxingfood.org
More local taxes won't save anyone money
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