1     
TRANSIENT ROOM TAX PROVISIONS

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Carl R. Albrecht

5     
Senate Sponsor: Evan J. Vickers

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to the transient room tax.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     modifies expenditure requirements for certain counties that impose a transient room
14     tax;
15          ▸     requires a county that imposes a transient room tax to include certain expenditure
16     information in the county's annual report;
17          ▸     allows a county auditor to coordinate with the State Tax Commission in
18     determining whether to require an audit of any person that is required to remit a
19     transient room tax;
20          ▸     removes certain time limitations applicable to a municipality's authority to impose a
21     transient room tax; and
22          ▸     makes technical and conforming changes.
23     Money Appropriated in this Bill:
24          This bill appropriates in fiscal year 2021:
25          ▸     to the State Tax Commission -- Tax Administration -- as an ongoing appropriation:
26               •     from the General Fund Restricted - Sales and Use Tax Admin. Fees, $264,000.
27     Other Special Clauses:
28          None
29     Utah Code Sections Affected:
30     AMENDS:
31          17-31-2, as last amended by Laws of Utah 2019, Chapters 136 and 304
32          17-31-5.5, as last amended by Laws of Utah 2019, Chapter 304
33          59-12-118, as last amended by Laws of Utah 1994, Chapter 259
34          59-12-302, as last amended by Laws of Utah 2018, Chapters 258 and 312
35          59-12-353, as last amended by Laws of Utah 2015, Chapter 258
36     

37     Be it enacted by the Legislature of the state of Utah:
38          Section 1. Section 17-31-2 is amended to read:
39          17-31-2. Purposes of transient room tax and expenditure of revenue -- Purchase
40     or lease of facilities -- Mitigating impacts of recreation, tourism, or conventions --
41     Issuance of bonds.
42          (1) As used in this section:
43          (a) "Aircraft" means the same as that term is defined in Section 72-10-102.
44          (b) "Airport" means the same as that term is defined in Section 72-10-102.
45          (c) "Airport authority" means the same as that term is defined in Section 72-10-102.
46          (d) "Airport operator" means the same as that term is defined in Section 72-10-102.
47          (e) "Base year revenue" means the amount of revenue generated by a transient room tax
48     and collected by a county for fiscal year 2018-19.
49          (f) "Base year promotion expenditure" means the amount of revenue generated by a
50     transient room tax that a county spent for the purpose described in Subsection (2)(a) during
51     fiscal year 2018-19.
52          [(a)] (g) "Eligible town" means a town that:
53          (i) is located within a county that has a national park within or partially within the
54     county's boundaries; and
55          (ii) imposes a resort communities tax authorized by Section 59-12-401.
56          (h) "Emergency medical services provider" means an eligible town, a local district, or a
57     special service district.
58          [(b)] (i) "Town" means a municipality that is classified as a town in accordance with
59     Section 10-2-301.
60          [(c)] (j) "Transient room tax" means a tax at a rate not to exceed 4.25% authorized by
61     Section 59-12-301.
62          (2) [Any] Subject to the requirements of this section, a county legislative body may
63     impose the transient room tax for the purposes of:
64          (a) establishing and promoting recreation, tourism, film production, and conventions;
65          (b) acquiring, leasing, constructing, furnishing, maintaining, or operating:
66          (i) convention meeting rooms;
67          (ii) exhibit halls;
68          (iii) visitor information centers;
69          (iv) museums;
70          (v) sports and recreation facilities including practice fields, stadiums, and arenas; [and]
71          (vi) related facilities;
72          (vii) if a national park is located within or partially within the county, the following on
73     any route designated by the county legislative body:
74          (A) transit service, including shuttle service; and
75          (B) parking infrastructure; and
76          (viii) an airport, if:
77          (A) the county is a county of the fourth, fifth, or sixth class; and
78          (B) the county is the airport operator of the airport;
79          (c) acquiring land, leasing land, or making payments for construction or infrastructure
80     improvements required for or related to the purposes listed in Subsection (2)(b); [and]
81          (d) as required to mitigate the impacts of recreation, tourism, or conventions in
82     counties of the fourth, fifth, and sixth class, paying for:
83          (i) solid waste disposal operations;
84          (ii) emergency medical services;
85          (iii) search and rescue activities;
86          (iv) law enforcement activities; and
87          (v) road repair and upgrade of:
88          (A) class B roads, as defined in Section 72-3-103;
89          (B) class C roads, as defined in Section 72-3-104; or
90          (C) class D roads, as defined in Section 72-3-105[.]; and
91          (e) making the annual payment of principal, interest, premiums, and necessary reserves
92     for any of the aggregate of bonds authorized under Subsection (5).
93          (3) (a) The county legislative body of a county that imposes a transient room tax at a
94     rate of 3% or less may expend the revenue generated as provided in Subsection (4), after
95     making any reduction required by Subsection (6).
96          (b) The county legislative body of a county that imposes a transient room tax at a rate
97     that exceeds 3% or increases the rate of transient room tax above 3% may expend:
98          (i) the revenue generated from the transient room tax at a rate of 3% as provided in
99     Subsection (4), after making any reduction required by Subsection (6); and
100          (ii) the revenue generated from the portion of the rate that exceeds 3%:
101          (A) for any combination of the purposes described in Subsections (2) and (5); and
102          (B) regardless of the limitation on expenditures for the purposes described in
103     Subsection (4).
104          (4) Subject to Subsection (6), a county may not expend more than 1/3 of the revenue
105     generated by a rate of transient room tax that does not exceed 3%, for any combination of the
106     [following purposes:] purposes described in Subsections (2)(b) through (2)(e).
107          [(a) (i) acquiring, leasing, constructing, furnishing, maintaining, or operating:]
108          [(A) convention meeting rooms;]
109          [(B) exhibit halls;]
110          [(C) visitor information centers;]
111          [(D) museums;]
112          [(E) sports and recreation facilities including practice fields, stadiums, and arenas; and]
113          [(F) related facilities; and]
114          [(ii) acquiring land, leasing land, or making payments for construction or infrastructure
115     improvements required for or related to the purposes described in Subsection (4)(a)(i);]
116          [(b) as required to mitigate the impacts of recreation, tourism, or conventions in
117     counties of the fourth, fifth, and sixth class, to pay for:]
118          [(i) solid waste disposal operations;]
119          [(ii) emergency medical services;]
120          [(iii) search and rescue activities;]
121          [(iv) law enforcement activities; and]
122          [(v) road repair and upgrade of:]
123          [(A) class B roads, as defined in Section 72-3-103;]
124          [(B) class C roads, as defined in Section 72-3-104; or]
125          [(C) class D roads, as defined in Section 72-3-105; or]
126          [(c) making the annual payment of principal, interest, premiums, and necessary
127     reserves for any or the aggregate of bonds authorized under Subsection (5).]
128          (5) (a) The county legislative body may issue bonds or cause bonds to be issued, as
129     permitted by law, to pay all or part of any costs incurred for the purposes set forth in
130     [Subsection (4)(a) or (b)] Subsections (2)(b) through (2)(d) that are permitted to be paid from
131     bond proceeds.
132          (b) If a county legislative body does not need the revenue generated by the transient
133     room tax for payment of principal, interest, premiums, and reserves on bonds issued as
134     provided in Subsection [(4)(c)] (2)(e), the county legislative body shall expend that revenue for
135     the purposes described in Subsection (2), subject to the limitation of Subsection (4).
136          (6) (a) In addition to the purposes described in Subsection (2), a county legislative
137     body may expend up to 4% of the total revenue generated by a transient room tax to pay a
138     provider for emergency medical services in one or more eligible towns.
139          [(b) An emergency medical services provider means an eligible town, a local district,
140     or a special service district.]
141          [(c)] (b) A county legislative body shall reduce the amount that the county is
142     authorized to expend for the purposes described in Subsection (4) by subtracting the amount of
143     transient room tax revenue expended in accordance with Subsection (6)(a) from the amount of
144     revenue described in Subsection (4).
145          (7) (a) A county legislative body in a county of the fourth, fifth, or sixth class shall
146     expend the revenue generated by a transient room tax as follows:
147          (i) an amount equal to the county's base year promotion expenditure for the purpose
148     described in Subsection (2)(a);
149          (ii) an amount equal to the difference between the county's base year revenue and the
150     county's base year promotion expenditure in accordance with Subsections (3) through (6); and
151          (iii) (A) 37% of the revenue that exceeds the county's base year revenue for the purpose
152     described in Subsection (2)(a); and
153          (B) subject to Subsection (7)(b), 63% of the revenue that exceeds the county's base
154     year revenue for any combination of the purposes described in Subsections (2)(b) through (e)
155     or to pay an emergency medical services provider for emergency medical services in one or
156     more eligible towns.
157          (b) A county legislative body in a county of the fourth, fifth, or sixth class may not:
158          (i) expend more than 4% of the revenue generated by a transient room tax to pay an
159     emergency medical services provider for emergency medical services in one or more eligible
160     towns; or
161          (ii) expend revenue generated by a transient room tax for the purpose described in
162     Subsection (2)(e) in an amount that exceeds the county's base year promotion expenditure.
163          (c) The provisions of this Subsection (7) apply notwithstanding any other provision of
164     this section.
165          (d) If the total amount of revenue generated by a transient room tax in a county of the
166     fourth, fifth, or sixth class is less than the county's base year promotion expenditure:
167          (i) Subsections (7)(a) through (c) do not apply; and
168          (ii) the county legislative body shall expend the revenue generated by the transient
169     room tax in accordance with Subsections (3) through (6).
170          Section 2. Section 17-31-5.5 is amended to read:
171          17-31-5.5. Report to county legislative body -- Content.
172          (1) The legislative body of each county that imposes a transient room tax under Section
173     59-12-301 or a tourism, recreation, cultural, convention, and airport facilities tax under Section
174     59-12-603 shall prepare annually a report in accordance with Subsection (2).
175          (2) The report described in Subsection (1) shall include a breakdown of expenditures
176     into the following categories:
177          (a) for the transient room tax, identification of expenditures for:
178          (i) establishing and promoting:
179          (A) recreation;
180          (B) tourism;
181          (C) film production; and
182          (D) conventions;
183          (ii) acquiring, leasing, constructing, furnishing, or operating:
184          (A) convention meeting rooms;
185          (B) exhibit halls;
186          (C) visitor information centers;
187          (D) museums; and
188          (E) related facilities;
189          (iii) acquiring or leasing land required for or related to the purposes listed in
190     Subsection (2)(a)(ii);
191          (iv) mitigation costs as identified in Subsection 17-31-2(2)(d); and
192          (v) making the annual payment of principal, interest, premiums, and necessary reserves
193     for any or the aggregate of bonds issued to pay for costs referred to in Subsections
194     17-31-2[(4)(c)] (2)(e) and (5)(a); and
195          (b) for the tourism, recreation, cultural, convention, and airport facilities tax,
196     identification of expenditures for:
197          (i) financing tourism promotion, which means an activity to develop, encourage,
198     solicit, or market tourism that attracts transient guests to the county, including planning,
199     product development, and advertising;
200          (ii) the development, operation, and maintenance of the following facilities as defined
201     in Section 59-12-602:
202          (A) an airport facility;
203          (B) a convention facility;
204          (C) a cultural facility;
205          (D) a recreation facility; and
206          (E) a tourist facility; and
207          (iii) a pledge as security for evidences of indebtedness under Subsection 59-12-603(3).
208          (3) For the transient room tax, the report described in Subsection (1) shall include a
209     breakdown of each expenditure described in Subsection (2)(a)(i), including:
210          (a) whether the expenditure was used for in-state and out-of-state promotion efforts;
211          (b) an explanation of how the expenditure targeted a cost created by tourism; and
212          (c) an accounting of the expenditure showing that the expenditure was used only for
213     costs directly related to a cost created by tourism.
214          [(3)] (4) A county legislative body shall provide a copy of the report described in
215     Subsection (1) to:
216          (a) the Utah Office of Tourism within the Governor's Office of Economic
217     Development;
218          (b) its tourism tax advisory board; and
219          (c) the Office of the Legislative Fiscal Analyst.
220          Section 3. Section 59-12-118 is amended to read:
221          59-12-118. Commission's authority to administer sales and use tax.
222          Except as provided in [Section] Sections 59-12-209 and 59-12-302, the commission
223     shall have exclusive authority to administer, operate, and enforce the provisions of this chapter
224     including:
225          (1) determining, assessing, and collecting any sales and use tax imposed pursuant to
226     this chapter;
227          (2) representing each county, city, and town's interest in any administrative proceeding
228     involving the state or local option sales and use tax;
229          (3) adjudicating any administrative proceedings involving the state or local option sales
230     and use tax;
231          (4) waiving, reducing, or compromising any penalty and interest imposed in connection
232     with any determination of state or local option sales or use tax; and
233          (5) prescribing forms and rules to conform with this chapter for the making of returns
234     and for the ascertainment, assessment, and collection of the taxes imposed under this chapter.
235          Section 4. Section 59-12-302 is amended to read:
236          59-12-302. Collection of tax -- Administrative charge.
237          (1) Except as provided in [Subsection (2) or (3)] Subsections (2), (3), and (4), the tax
238     authorized under this part shall be administered, collected, and enforced in accordance with:
239          (a) the same procedures used to administer, collect, and enforce the tax under:
240          (i) Part 1, Tax Collection; or
241          (ii) Part 2, Local Sales and Use Tax Act; and
242          (b) Chapter 1, General Taxation Policies.
243          (2) The location of a transaction shall be determined in accordance with Sections
244     59-12-211 through 59-12-215.
245          (3) A tax under this part is not subject to Section 59-12-107.1 or 59-12-123 or
246     Subsections 59-12-205(2) through (6).
247          (4) A county auditor may coordinate with the commission in determining whether to
248     require an audit of any person that is required to remit a tax authorized under this part.
249          [(4)] (5) The commission:
250          (a) shall distribute the revenue collected from the tax to the county within which the
251     revenue was collected; and
252          (b) shall retain and deposit an administrative charge in accordance with Section
253     59-1-306 from revenue the commission collects from a tax under this part.
254          Section 5. Section 59-12-353 is amended to read:
255          59-12-353. Additional municipal transient room tax.
256          [(1) Subject to the limitations of Subsection (2), the] The governing body of a
257     municipality may, in addition to the tax authorized under Section 59-12-352, impose a tax of
258     not to exceed .5% on charges for the accommodations and services described in Subsection
259     59-12-103(1)(i) if the governing body of the municipality:
260          [(a)] (1) before January 1, 1996, levied and collected a license fee or tax under Section
261     10-1-203; and
262          [(b)] (2) before January 1, 1997, took official action to obligate the municipality in
263     reliance on the license fees or taxes under Subsection (1)[(a)] to the payment of debt service on
264     bonds or other indebtedness, including lease payments under a lease purchase agreement.
265          [(2) The governing body of a municipality may impose the tax under this section until
266     the sooner of:]
267          [(a) the day on which the following have been paid in full:]
268          [(i) the debt service on bonds or other indebtedness, including lease payments under a
269     lease purchase agreement described in Subsection (1)(b); and]
270          [(ii) refunding obligations that the municipality incurred as a result of the debt service
271     on bonds or other indebtedness, including lease payments under a lease purchase agreement
272     described in Subsection (1)(b); or]
273          [(b) 25 years from the day on which the municipality levied the tax under this section.]
274          Section 6. Appropriation.
275          The following sums of money are appropriated for the fiscal year beginning July 1,
276     2020, and ending June 30, 2021. These are additions to amounts previously appropriated for
277     fiscal year 2021. Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures
278     Act, the Legislature appropriates the following sums of money from the funds or accounts
279     indicated for the use and support of the government of the state of Utah.
280     ITEM 1
281          To State Tax Commission -- Tax Administration
282               From General Fund Restricted - Sales and Use Tax Admin. Fees
$264,000

283               Schedule of Programs:
284                    Auditing Division                         $140,000
285                    Tax Payer Services                         $124,000
286          The Legislature intends that the State Tax Commission use the appropriation under this
287     item to employ staff or purchase resources to ensure that persons in counties of the fourth, fifth,
288     and sixth class comply with the collection and remittance requirements of a transient room tax
289     authorized in Title 17, Chapter 31, Recreational, Tourist, and Convention Bureaus, and Section
290     59-12-301.