The Delaware Hotel and Lodging Association is mobilizing against legislation that could levy a hotel room tax of up to three percent in New Castle County.
House Bill 377 limits the tax authority to the state’s largest county, but industry officials are concerned that counties and smaller cities two other counties in the state might also seek permission from the General Assembly.
House Bill 377 has been placed in the House Administration Committee.
The association listed the following objections to the bill:
- The 38 percent increase in the lodging tax will impact the competitiveness of the hotel industry and cost business, as the tax will be higher than in surrounding areas
- The loss of business will impact the ability to create and maintain jobs, many at entry level positions.
- New hotel development will slow down and limit growth in the industry.
- The New Castle County Executive and Council are pushing for the maximum tax increase of 3 percent with no mention of any allocation for tourism marketing.
- There is no mention of addressing Airbnb, the operator of illegal hotels in Delaware that does do not pay a lodging tax.
- A move by the state to take its lodging tax revenues that was stopped at the last minute. A portion of lodging tax revenue now goes to tourism bureaus.
- Wilmington has a two percent room tax that was supposed to be for “two years and expire” and now is law for ten plus years.
- Hotels get comments about the 8 percent lodging tax in a sales tax-free state. Under the county proposal, that figure would rise to 11 percent.
- An overall lack of trust of the word of government has really hurt our relations in the State, and now County Executive and Council.
The association urged its members to contact members of the House committee with their concerns.
