Sen. Alloway sponsors bill to raise local hotel tax

Senate Bill 838 would allow raising the tax visitors pay for hotel stays from 3 percent to 5 percent in applicable counties.

Senator Richard Alloway (R) has sponsored a bill in the state legislature that would allow certain counties to increase their hotel taxes. If enacted, Senate Bill 838 would open the door to raising the tax visitors pay for hotel stays from 3 percent to 5 percent in applicable counties. And that’s in addition to the tax the state levies.

Currently, the state collects a 6-percent tax from visitors staying in hotel rooms. Targeted legislation allowed about a dozen counties to levy an additional, local hotel tax. In 2000, Act 142 allowed the remaining counties to apply a 3-percent tax to hotel stays. Currently 53 of 67 counties in the state have a 3-percent local hotel tax.

Senate Bill 838 initially focused on raising the hotel tax in only Franklin County, but amendments have broadened it to include York, Schuylkill, Butler, Washington, and Indiana Counties, as well as Bensalem Township.

As the bill stands now, 75 percent of collected monies would go towards promotion and marketing of tourism. State funds for tourism promotion have been decreasing rapidly from a high of $44.3 million in 2000 to $7.3 million for next year. The remaining 25 percent would go towards economic development, historical preservation, the arts, and grants to municipalities.

Rob Fulton, President and CEO of the Pennsylvania Association of Travel and Tourism supports allowing counties to increase their local hotel taxes, but said the current approach is problematic. He wants to see a bill that would allow all counties currently at 3-percent to be able to raise their hotel taxes, rather than drafting piecemeal legislation that only covers a small number of counties. Further, he wants to keep legislation at the county level, rather than including townships (Pa. has 1,454 townships, which could make things complicated), and wants to see all collected money go towards tourism promotion, rather than reserving a quarter of the funds for other purposes.

“As our state funding has really decreased to market and promote the commonwealth of Pennsylvania, there’s really more pressure on our local tourism promotion agencies to pick up some of that slack and promote their counties and their regions,” Fulton said. “We just are sensitive to trying to protect those dollars.”

The bill still needs to get through the Senate before it goes to the House of Representatives. Both chambers have a limited time to vote on remaining bills – there are only eight session days scheduled before the November 4th election.