New Castle News

Closer Look

August 2, 2013

Bill would hike hotel tax

CNHI — A proposed bill introduced in the state House would allow nine counties — including Cambria and Mercer — to hike the county hotel tax by 60 percent.

Representatives of the trade association for visitors bureaus said it would like to see all counties given the chance to raise the hotel tax.

Currently in Pennsylvania, the state collects 5 percent on the cost of a hotel room and most counties collect 3 percent.

A separate piece of legislation in the Senate would allow counties with between 149,000 and 209,999 people, to raise the hotel tax. The Senate bill provides for the same level of tax increase as the House bill.

Industry experts and lawmakers at a public hearing on House Bill 1486 were more hung up on the question of how many counties ought to be able to increase the hotel tax and how they might use the money than they were about whether a tax increase is appropriate.

Joe Massaro, chairman of the board of the Pennsylvania Travel and Tourism Association, said the group would support legislation to increase the county hotel tax to as much as 7 percent, more than double the amount most counties now collect. Massaro is general manager of the Harrisburg Hilton.

The Pennsylvania Restaurant and Lodging Association also supports a tax hike, as long as the money is reserved for tourism promotion, a spokeswoman said. The organization supports raising the tax to as much as 6 percent, she said.

Increasing the county hotel tax from 3 to 5 percent would increase the tax on a one-night stay in a $150 a night hotel room from $4.50 to $7.50. Increasing the tax to 7 percent would put it at $10.50. All of that is on top of the $7.50 in tax from the 5 percent the state collects.

The dollars really add for local visitor bureaus though.

VisitMercerCountyPA got about $650,000 in hotel tax dollars last year, Peggy Mazyck, executive director, said. If the state were to allow counties to increase the hotel tax to 7 percent, it could mean another $890,000 for tourism promotion in the county.

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