Clarifies that the meals and rooms tax applies to motor vehicle rentals facilitated by an app, website, or other online system.
Meals, Rooms Tax Revisions
In recent years, there have been several attempts to alter the way New Hampshire taxes rooms and meals.
Local meals and rooms taxes
The 2010 Legislature considered a bill that would have allowed cities and towns the option to add a local tax on meals and rooms. However, opponents feared that meals and rooms taxes in addition to the 9% already being charged by the state could hurt tourism across New Hampshire, and the bill failed.
Changing how revenue is distributed
New Hampshire currently distributes meals and rooms tax revenues to cities and towns across the state, based on each community's population.
In the 2013 legislative session, then state Sen. Nancy Stiles (R-Hampton) filed a bill, SB 121, which would have seen 56 percent of the tax revenue still distributed based on population, but 44 percent distributed back to the towns that had raised it, based proportionally on how much revenue they generated. The bill failed.
"My goal is to get some more money going back to the communities that raised it," Stiles said at the time she introduced the bill. "There is a cost for them to host tourism." For example, tourist towns may require larger police forces to manage crowds.
However, a redistribution could significantly hurt the budgets of communities that lack tourism. Western New Hampshire, for example, generates far less meals and rooms tax revenue than the Seacoast and the North Country, both popular tourist destinations.
There have been several attempts since to pass similar laws, most recently in 2017, but so far none have succeeded.
Caps how much operators may keep of meals and rooms tax revenue to $100 per month, and sends the revenue operators would otherwise keep to school building aid.
Excludes occupancies of 30 days or more from the meals and rooms tax. At the time of this bill's submission, occupancies of 185 days or more are excluded from the tax.
Requires the Department of Revenue Administration to distribute a portion of meals and rooms tax revenue back to towns and cities in proportion to amount of that revenue collected within each town or city.
Clarifies existing law relative to the meals and rentals tax for online travel companies, accommodation marketplaces, or any other third-party agent, or other arrangement giving a person the ability or authority to engage in the sale of taxable accommodations ("room remarketers").
Modifies the meals and rooms tax to include "the prearrangement of motor vehicle rentals with an online enabled technology application service, website, or system."
Allows towns and cities to adopt an additional surcharge under the meals and rooms tax, up to $2 per occupancy per day at a hotel.
Requires a portion of meals and room tax revenue to be credited to the Fish and Game search and rescue fund.
Caps the amount businesses may retain from the meals and rooms tax, to $100 per month. Any extra revenue the state receives from this change would go to school building aid.
Requires the Department of Revenue Administration to distribute a portion of the revenue collected from occupancies under the meals and rooms tax to towns and cities in proportion to the total amount of such taxes collected in the state.
Limits how much municipalities can regulate short-term rentals, and allows a "lodging marketplace" - such as Airbnb - to be licensed by the state to collect meals and rooms taxes on behalf of vacation and short-term rentals. The bill was amended to instead establish a committee to study the regulation and taxation of vacation rentals and short-term rentals. A conference committee added back in limits on local regulation of short-term rentals.
Requires the Department of Revenue Administration to collect and publicly report the amount of meals and room tax revenues collected in each city or town.
Requires the Department of Revenue Administration to report to cities and towns the amount of meals and room tax revenues collected in the city or town.
Requires advertisements of short-term rentals to display the meals and rooms license number of the operator. Short-term rentals - for example through Airbnb - are already required to register and pay meals and rooms tax, but many do not.
Allows municipalities to regulate short-term rental businesses. An amendment revised the bill to establish a committee to study the effect of short-term rentals on municipalities.
Requires an operator under the meals and rooms tax who rents rooms in a hotel or hotels with more than one physical address under a single license to provide the Department of Revenue Administration with a schedule of the physical address of each hotel.
Requires the Department of Revenue Administration to distribute a portion of meals and rooms tax collected to towns and cities.
Allows towns and cities to adopt an additional surcharge under the meals and rooms tax on hotel occupancy.
Repeals the provision allowing operators to retain 3% of meals and rooms taxes collected. The bill continually appropriates 3% of meals and rooms tax revenues to school building aid. The Department of Revenue Administration estimates this would provide roughly $8 million for school building aid.
Originally written to add the distribution of 1% of the net income from the meals and rooms tax to towns and cities in proportion to the amount collected within such town or city. The Senate amended the bill to instead establish a committee to study the formula for distribution of meals and rooms tax revenues.
Permits municipalities to adopt ordinances to assess hotel occupancy fees for the use of municipal services (not to exceed $1 per unit per night).
Decreases the meals and rooms tax.
Makes administrative changes to the meals and rooms tax, and establishes requirements and procedures for a municipality to calculate and set the applicable tax rates for property taxes.
Distributes meals and rooms tax revenue to municipalities according to how much revenue came from each municipality.
Makes various regulatory changes, such as allowing towns to adopt a local meals and rooms tax in addition to the state meals and rooms tax and authorizing expanded gambling.
Should NH revise the meals and rooms tax?
Several moves to modify the meals and rooms tax were floated for 2018, including:
- A proposal to exempt occupancies that last longer than 30 days from paying the tax
- A move to allow towns to add a local surcharge to meals and rooms tax rates
- A move to grant more meals and rooms tax revenue back to the towns that generated it
All of these proposals were killed in the House.
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