PROCESS FOR ASSESSMENT/COLLECTION/DISTRIBUTION OF HOTEL/MOTEL TAXES & REQUIREMENTS FOR EXPENDITURES OF RESULTING RECEIPTS

Transcription

1 PROCESS FOR ASSESSMENT/COLLECTION/DISTRIBUTION OF HOTEL/MOTEL TAXES & REQUIREMENTS FOR EXPENDITURES OF RESULTING RECEIPTS Josh Schamberger, President Iowa City/Coralville Area Convention & Visitors Bureau

2 HOW? 1. Council passes resolution to hold election. 2. Election date determined. 3. Pass or fails with simple majority. 4. Jan 1 (11/14) or July 1 (5/14) start date

3 DISTRIBUTION 1. Tax is remitted as part of hotel s quarterly tax returns. 2. Returned (also quarterly) by Iowa Department of Revenue to the collecting jurisdiction. 3. Dispersed in accordance with council policy*. *policy must be in-line with Iowa Code Sec. 423A.7(4)(a)

4 IOWA CODE SEC. 423A.7(4)(A)? 50% of all collections must be spent on the acquisition of sites for, or constructing, improving, enlarging, equipping, repairing, operating, or maintaining of recreation, convention, cultural, or entertainment facilities including but not limited to memorial buildings, halls and monuments, civic center convention buildings, auditoriums, coliseums, and parking areas or facilities located at those recreation, convention, cultural, or entertainment facilities or the payment of principal and interest, when due, on bonds or other evidence of indebtedness issued by the county or city for those recreation, convention, cultural, or entertainment facilities; or for the promotion and encouragement of tourist and convention business in the city or county and surrounding areas Flexibility, yes. But remember this is a visitor paid non-guaranteed revenue stream. Again, paid BY visitors.

5 IOWA CODE SEC. 423A.7(4)(A)? The other 50%? Whatever the community (council) deems necessary. General fund allocation.

6 WHY? Visitor paid revenue for parks, community beautification, destination marketing, festivals, special events. Potholes and public safety.

7 SURROUNDING CITIES/COUNTIES Iowa City 7% Coralville 7% North Liberty 7% Iowa County 7% Jones County 5% Cedar Rapids 7% Marion 7% Dubuque 7% Keokuk 7% Lisbon 7% Mount Vernon 7% Ottumwa 7% Quad Cities 7% Iowa City ($1.1M in FY17) 47.5% Public Safety 27.5% Parks & Recreation 25% Iowa City/Coralville Area CVB Coralville ($2.8M in FY17) 100% General Fund 27% Iowa City/Coralville Area CVB 40% Coralville Parks & Recreation North Liberty ($76K in FY17) 100% General Fund 25% Iowa City/Coralville Area CVB 50% Parks & Recreation

8 FAST FACTS Last year visitors to Johnson County spent $388M. The local tourism industry employs 3,700 residents. Visitors spent $28.8M in local/state taxes and $4.06M in hotel/motel tax QUESTIONS?

9 Q. How does the issue of hotel/motel tax get on the ballot? A city council passes a resolution to hold an election. The resolution is sent to the county commissioner of elections, usually the auditor. The auditor presents the resolution to the supervisors, who vote to direct the commissioner of elections to set up an election date. The issue passes or fails based on a simple majority vote. Q. When can the tax be imposed in a new jurisdiction? On one of two start dates: January 1 or July 1. The Department must be given 45 days notice of the imposition of the tax in a new jurisdiction. This means an election to impose the tax in a new jurisdiction must be held on or before November 14 or May 14. Regardless of the election date, the county auditor must notify the Director of the Department within 10 days of the election if the tax is approved in a new jurisdiction. Q. How long does the tax stay in effect? Once imposed, the hotel/motel tax must remain in effect at the rate imposed for a minimum of one year. Q. When can an existing tax rate be changed or repealed? After the 1-year period expires, the tax can be changed or repealed on one of two annual dates: December 31 or June 30. The Department must be given 45 days notice of the change or repeal of the tax in an existing jurisdiction. This means an election to change or repeal the tax in an existing jurisdiction must be held on or before November 13 or May 13. Regardless of the election date, the county auditor must notify the Director of the Department within 10 days of the election if the tax is changed or repealed in an existing jurisdiction. Q. When does the city or county notify the Department of the start date? The Department must be notified at least 45 days before imposition. This also applies to rate changes and repeals. Q. How is the hotel/motel tax distributed? The tax is remitted to the Department with the hotel/motels' quarterly sales tax returns. It is then distributed to the appropriate jurisdictions on a quarterly basis. The amount distributed is not an estimate; it is the actual amount remitted.

10 Q. What is the hotel/motel tax rate? The hotel/motel tax rate cannot exceed 7% and must be imposed in increments of one or more full percentage points. Q. Is the state tax rate charged? Yes. The hotel/motel tax is in addition to the 5% state excise tax on room rental. Sales other than room rental are subject to the 6% state sales tax rate and local option sales tax, if any.

11 Iowa Department of Revenue Iowa Locally Imposed Hotel and Motel Tax Rates 7/1/2017 through December 31, 2017 These rates are in addition to the 5% state excise tax on room rentals. Unincorporated Areas counties Appanoose County 7% Fremont County 7% Lee County 7% Osceola County 5% Clayton County 7% Hamilton County 5% Lyon County 7% Polk County 7% Dickinson County 5% Iowa County 7% Madison County 5% Poweshiek County 7% Franklin County 5% Jones County 5% Mitchell County 7% Shelby County 7% Worth County 7% Cities 155 or Land Use District 1 =>156 Adair 5% Davenport 7% Keosauqua 7% Perry 7% Albia 7% De Soto 7% Knoxville 7% Pleasant Hill 7% Adel 7% Decorah 7% Lake View 7% Pocahontas 7% Algona 7% Denison 7% Lamoni 7% Polk City 7% Altoona 7% Des Moines 7% Lansing 7% Red Oak 7% Amana Colonies 7% DeWitt 7% Le Mars 5% Riverside 7% Ames 7% Dows 7% LeClaire 7% Sergeant Bluff 7% Anamosa 7% Dubuque 7% Lisbon 7% Shelby 7% Ankeny 7% Dyersville 7% Lynnville 7% Sheldon 7% Arnolds Park 5% Eagle Grove 7% Manchester 7% Shenandoah 7% Atlantic 4% Eldora 7% Manning 7% Sibley 5% Avoca 7% Eldridge 7% Maquoketa 7% Sioux Center 5% Bedford 7% Elkader 7% Marion 7% Sioux City 7% Bellevue 7% Elk Horn 5% Marquette 7% Spencer 7% Bettendorf 7% Emmetsburg 7% Marshalltown 7% Spirit Lake 5% Bloomfield 7% Estherville 7% Marcus 5% Storm Lake 7% Bondurant 7% Evansdale 7% Mason City 7% Story City 7% Boone 7% Fairfield 7% McGregor 7% Strawberry Point 5% Burlington 7% Forest City 7% Milford 7% Stuart 5% Cantril 7% Fort Dodge 7% Missouri Valley 7% Tiffin 7% Carlisle 7% Fort Madison 7% Monticello 5% Toledo 7% Carroll 7% Fredericksburg 7% Mount Ayr 7% Underwood 7% Carter Lake 7% Garner 7% Mount Pleasant 7% Urbandale 7% Cedar Falls 7% Greenfield 7% Mount Vernon 7% Vedic City 5% Cedar Rapids 7% Grimes 7% Muscatine 7% Wahpeton 5% Centerville 7% Grinnell 7% Nevada 5% Waukon 4% Chariton 7% Guttenberg 7% New Hampton 7% Walcott 7% Charles City 7% Hampton 5% Newton 7% Walnut 7% Cherokee 7% Harlan 7% North Liberty 7% Waterloo 7% Clarinda 7% Holstein 7% Norwalk 7% Waukee 7% Clarion 7% Humboldt 7% Oelwein 7% Waverly 7% Clear Lake 7% Ida Grove 7% Okoboji 5% Webster City 7% Clinton 7% Independence 7% Onawa 7% West Bend 5% Clive 7% Indianola 7% Orange City 7% West Burlington 7% Colfax 7% Iowa City 7% Osage 7% West Des Moines 7% Coralville 7% Iowa Falls 7% Osceola 7% West Union 6% Council Bluffs 7% Jefferson 7% Oskaloosa 5% Williamsburg 7% Cresco 7% Johnston 7% Ottumwa 7% Windsor Heights 7% Creston 7% Keokuk 7% Pella 7% Winterset 7% Indicates a New Jurisdiction Indicates a Rate Change Iowa Department of Revenue

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