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Tourism groups object to hotel tax legislation

March 30, 2007|by ANDREW SCHOTZ

ANNAPOLIS - A proposal to let certain Maryland municipalities raise their hotel tax has passed the state House and is in the Senate.

Local opinions are mixed. Three of Washington County's state delegates support it; two voted no.

Washington County is among six counties in which municipalities could raise their hotel tax by 1 percentage point. For example, the city of Hagerstown could add 1 percent to the county's current tax of 6 percent.

The Hagerstown-Washington County Convention & Visitors Bureau came out against an early version of the bill, which would have allowed an increase of up to 3 percent.

"There'd be an unfairness based on geography," Thomas B. Riford, the bureau's president and CEO, said Thursday. Two hotels separated by a short distance but a municipal boundary would have two different taxes.

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The bureau gets half of the hotel tax revenue in Washington County. The rest is distributed to county tourism, recreation or cultural projects.

Del. Robert A. McKee, R-Washington, said most Washington County hotels are in Hagers- town, yet tax revenue is divided throughout the county.

But Del. Christopher B. Shank, R-Washington, said an extra tax would put hotels in Hagerstown at a competitive disadvantage.

The House voted in favor of the bill 99-37 on Monday.

Shank and Del. LeRoy E. Myers Jr., R-Washington/Allegany, voted no.

The bill now is in the Senate Budget and Taxation Committee, which includes Sen. Donald F. Munson, R-Washington.

Munson said he favors the bill because it's good for the city. For capital projects, "the city needs revenue," he said.

The Maryland Hotel & Lodging Association is opposed.

"The municipal hotels have two equally unfair choices - either absorb the tax without raising prices, taking a hit on their bottom line, or pass on the tax and risk losing business," Mary Jo McCulloch, the association's president, wrote in a letter to the House Ways and Means Committee, which heard the bill.

The Maryland Municipal League supports the bill. Its letter to the committee called the idea "a positive means of providing a revenue alternative for municipal governments that have few to choose from."

The bill, as amended, applies to counties - such as Washington County - that don't have an agreement to share hotel tax revenue with their municipalities.

It also exempts hotels with 10 rooms or fewer.

On the Web at http://mlis.state.md.us/2007rs/billfile/hb0518.htm

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