Chapter 3.16
LODGING TAX*
Sections:
3.16.010 Fund created – Purpose.
3.16.020 Tax levied – Collection of basic tax and additional tax.
3.16.027 Disposition of proceeds.
3.16.030 Lodging tax advisory committee – Created.
3.16.040 Lodging tax advisory committee – Membership.
3.16.050 Lodging tax advisory committee – Duties.
3.16.065 Tax credit – Amount due to state.
3.16.070 Tax credit – Special excise tax.
3.16.080 Annual process to allocate lodging tax revenues.
3.16.100 Economic impact report required.
* Prior legislation: Res. 112-1987 and 178-1980.
3.16.010 Fund created – Purpose.
There is created in the office of the County treasurer a special fund to be known as the “lodging tax fund” into which shall be placed the proceeds from all taxes levied under SJCC 3.16.020. The treasurer shall deposit into the lodging tax fund all funds received pursuant to the taxes imposed by SJCC 3.16.020(A) and (B); and all funds received pursuant to lease or agreement of the County from the operation and/or rental of such tourism-related facilities; and the proceeds from the sale of any and all bonds which the County may issue and sell for the purpose of providing funds for the development, acquisition and operation of such tourism-related facilities; and all funds received by the County for the purpose of attracting visitors and the proceeds from the sale of any and all bonds which the County may issue and sell for the purpose of providing funds for the tourism promotion or tourism-related facilities. Until the withdrawal of funds for use, the treasurer may invest the same in interest bearing securities in the manner provided by law and the proceeds shall be added to the fund. The County treasurer shall pay out money credited to such fund only upon warrants issued against it by the County, as budgeted, upon vouchers approved by the County auditor for the purposes stated in this chapter. (Ord. 01-2022 § 1; Ord. 7-2008 § 2; Ord. 18-2002 § 1; Ord. 9-1997 § 1)
3.16.020 Tax levied – Collection of basic tax and additional tax.
A. Basic Tax. Pursuant to RCW 67.28.180, there is imposed and shall be collected a basic special excise tax in the amount of two percent upon the sale of or charge made for the furnishing of lodging by any transient accommodation for less than 30 days including but not limited to each hotel, motel, bed and breakfast inn, camp and the granting of any similar license to use real property, within the County, as distinguished from the renting or leasing of real property.
B. Additional Tax. Pursuant to RCW 67.28.181, there is imposed and shall be collected an additional special excise tax in an additional amount of two percent upon the sale of or charge made for the furnishing of lodging by any transient accommodation for less than 30 days including but not limited to each hotel, motel, bed and breakfast inn, camp and the granting of any similar license to use real property, within the County, as distinguished from the renting or leasing of real property. (Ord. 18-2002 § 2; Ord. 9-1997 § 2)
3.16.023 Collection of tax.
The levy of all such excise tax described in SJCC 3.16.020 shall be collected by the Department of Revenue of the state of Washington and by it remitted to the County treasurer. (Ord. 18-2002 § 3)
3.16.027 Disposition of proceeds.
The proceeds of such taxes collected pursuant to SJCC 3.16.020(A) and RCW 67.28.180 and pursuant to SJCC 3.16.020(B) and RCW 67.28.181 shall be used for any purpose allowed by Chapter 67.28 RCW after following the application and award process established by the County. (Ord. 01-2022 § 2; Ord. 18-2002 § 4)
3.16.030 Lodging tax advisory committee – Created.
Pursuant to RCW 67.28.1817, a lodging tax advisory committee is created composed of at least seven members who shall have the duties as prescribed in Chapter 67.28 RCW. (Ord. 01-2022 § 3; Ord. 7-2008 § 3; Ord. 18-2002 § 5; Ord. 9-1997 § 3)
3.16.040 Lodging tax advisory committee – Membership.
The membership of the lodging tax advisory committee shall be appointed by the County council to serve without compensation for a period of three years with terms staggered so that approximately one-third of the committee positions are due for appointment each year. The committee membership shall include: (A) three members who are representatives of businesses required to collect tax under this chapter, one from each of the Council residency districts; and (B) three members who are persons involved in activities authorized to be funded by revenue received under this chapter, one from each of the Council residency districts. In accordance with RCW 67.28.1817(1), persons eligible for appointment under provision (A) of this section are not eligible for appointment under provision (B), and persons eligible for appointment under provision (B) of this section are not eligible for appointment under provision (A). The number of members who are representatives of businesses required to collect tax under this chapter shall equal the number of members who are involved in activities authorized to be funded by revenue received under this chapter. One member shall be an elected official of the County who shall serve as chair of the committee. (Ord. 01-2022 § 4; Ord. 7-2008 § 4; Ord. 9-1997 § 4)
3.16.050 Lodging tax advisory committee – Duties.
Any proposed imposition of tax, increase in the rate of tax, repeal of an exemption of tax or expenditure of revenue under this chapter shall be submitted to the committee for review and comment. The submission shall occur at least 45 days before final action on or the passage of the proposal by the County. The committee shall submit comments on the proposal in a timely manner through generally applicable public comment procedures. The comments shall include an analysis of the extent to which the proposal will accommodate activities for tourists or increase tourism, and the extent to which the proposal will affect the long term stability of the fund created by SJCC 3.16.010.
The committee shall develop a long-range plan for the expenditure of the monies available in the lodging tax fund and shall update it on an annual basis and shall recommend it to the County council. Changes in the use of the tax from previous years will be made after the solicitation for proposals for the expenditure from each account, the form of which will be prepared by the administrative staff after the committee has recommended and the County council has approved the criteria for the process. The committee shall review the proposals received and make a recommendation to the council for the expenditure from each account. Contracting responsibilities shall be performed by the County administrator. Contract recipients shall be required to meet the reporting requirements imposed by Chapter 67.28 RCW and other County reporting requirements as identified by the agreement. (Ord. 01-2022 § 5; Ord. 7-2008 § 5; Ord. 9-1997 § 5)
3.16.060 Definitions.
Whenever the following words and phrases appear in this chapter, they shall be given the meaning attributed to them by this section unless the context clearly requires otherwise.
“Acquisition” includes, but is not limited to, siting, acquisition, design, construction, refurbishing, expansion, repair, and improvement, including paying or securing payment of all or any portion of general obligation bonds, leases, revenue bonds, or other obligations issued or incurred for such purpose or purposes under this chapter.
“Operation” includes, but is not limited to, operation, management and marketing.
“Person” means the federal government or any agency thereof; the state or any agency, subdivision, taxing district or municipal corporation thereof other than county, city or town; any individual, association, partnership, or private profit or nonprofit corporation.
“Tourism” means any economic activity resulting from tourists, which may include sales of overnight lodging, meals, tours, gifts or souvenirs.
“Tourism promotion” means activities, operations, and expenditures designed to increase tourism, including but not limited to advertising, publicizing, or otherwise distributing information for the purpose of attracting and welcoming tourists; developing strategies to expand tourism; operating tourism promotion agencies; and funding the marketing of or the operation of special events and festivals designed to attract tourists.
“Tourism-related facility” means real or tangible personal property with a usable life of three or more years, or constructed with volunteer labor that is: (A)(1) owned by a public entity; (2) owned by a nonprofit organization described under Section 501(c)(3) of the Federal Internal Revenue Code of 1986, as amended; or (3) owned by a nonprofit organization described under Section 501(c)(6) of the Federal Internal Revenue Code of 1986, as amended, a business organization, destination marketing organization, main street organization, lodging association, or chamber of commerce; and (B) used to support tourism, performing arts, or to accommodate tourist activities.
“Tourist” means a person who travels from a place of residence to a different town, city, county, state or country, for purposes of business, pleasure, recreation, education, arts, heritage, or culture. (Ord. 7-2008 § 6; Ord. 9-1997 § 6)
3.16.065 Tax credit – Amount due to state.
In accordance with RCW 67.28.1801, the basic tax collected pursuant to RCW 67.28.180 and SJCC 3.16.020(A) on a sale of lodging shall be credited against the amount of sales tax due to the state under Chapter 82.08 RCW on the same sale of lodging. (Ord. 01-2022 § 6; Ord. 7-2008 § 7; Ord. 18-2002 § 6)
3.16.070 Tax credit – Special excise tax.
In the event there is a city special excise tax adopted or to be adopted pursuant to RCW 67.28.180 or 67.28.181, there is hereby authorized a credit against the County tax levied and collected for the full amount of any city or town tax imposed under this section upon the same taxable event. (Ord. 7-2008 § 8; Ord. 18-2002 § 7; Ord. 9-1997 § 7)
3.16.080 Annual process to allocate lodging tax revenues.
A. Revenues from the County hotel/motel tax will be allocated according to calculations for the annual amount of available funds. Such calculations will be based on the County auditor’s estimate prior to the finalization of the annual County budget, less the dedicated annual contracts from the appropriate categories; and
B. The performing and visual arts, County fair/multi-purpose facilities, visitor information services, and special projects fund shall follow consistent solicitation procedures for public notification of application availability; and
C. All required procedures of the County auditor, Chapter 67.28 RCW and the County prosecuting attorney will be adhered to for the disbursement of funds in each category by the advisory entities and the recipients of such funds; and
D. All recipients shall prepare their spending plan, which shall indicate their supportive reasons for the allocation, for the County council by the first week of November of each calendar year. (Ord. 01-2022 § 6; Ord. 5-2008 § 9; Ord. 14-2000 § 7(D); Res. 215-1992. Formerly 2.10.140)
3.16.090 Expenditures.
A. Administrative Fee. The County treasurer is authorized to deduct an administrative fee not to exceed one percent from the tourism facilities account and one percent from the tourism promotion account to pay the costs of administering the respective programs.
B. Distributions. Appropriations from the lodging tax fund for the current budget year will be based on the actual lodging tax revenue collections from the previous San Juan County budget year (January through December), less expenses of the fund.
C. Length of Contract. Appropriations and distributions may take the form of contracts that, at the discretion of the County council, may exceed one year in duration. (Ord. 01-2022 § 7; Ord. 4-2014 § 1; Ord. 1-2011 § 2; Ord. 7-2008 § 9)
3.16.100 Economic impact report required.
Notwithstanding the provisions of SJCC 3.16.027, lodging tax revenues under this chapter may be used, directly by the County or indirectly through a convention and visitors bureau or destination marketing organization:
A. For the marketing and operations of special events and festivals; and
B. To support the operations and capital expenditures of tourism-related facilities owned by nonprofit organizations described under 501(c)(3) and 501(c)(6) of the Federal Internal Revenue Code of 1986, as amended.
The County must submit an annual economic impact report for any lodging tax revenues expended for the purposes stated in this section. Such reports shall be submitted to the Joint Legislative Audit and Review Committee (JLARC). This economic impact report, at a minimum, must include: (1) the total revenue received under this chapter for each year; (2) the list of festivals, special events, or nonprofit 501(c)(3) or 501(c)(6) organizations that received funds under this chapter; (3) the amount of revenue expended on each festival, special event, or tourism-related facility owned by a nonprofit 501(c)(3) or 501(c)(6) organization; (4) the estimated number of tourists, persons traveling over 50 miles to the destination, persons remaining at the destination overnight, and lodging stays generated per festival, special event, or tourism-related facility owned by a nonprofit 501(c)(3) or 501(c)(6) organization; (5) an estimated increase in sales and use tax revenues attributable to the special event, festival, or tourism-related facility owned by a nonprofit 501(c)(3) or 501(c)(6) organization; and (6) any other measurements the County finds that demonstrate the impact of the increased tourism attributable to the festival, special event, or tourism-related facility owned by a nonprofit 501(c)(3) or 501(c)(6) organization. (Ord. 01-2022 § 8; Ord. 7-2008 § 10)