H. B. 3168


(By Delegate Mathews)
[Introduced March 30, 2001; referred to the
Committee on Finance.]




A BILL to amend and reenact sections one, two, three, four, five, eight, nine, ten, thirteen, thirteen-a, fourteen and fifteen, article eighteen, chapter seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to creating a state tax on hotel and motel occupancy to provide for a tourist business development fund.

Be it enacted by the Legislature of West Virginia:
That sections one, two, three, four, five, eight, nine, ten, thirteen, thirteen-a, fourteen and fifteen, article eighteen, chapter seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 18. HOTEL OCCUPANCY TAX.
§7-18-1. Local hotel occupancy tax.

(a) Authority to impose. -- On and after the first day of July, one thousand nine hundred eighty-five, any county or municipality may impose and collect a privilege tax upon the occupancy of hotel rooms located within its taxing jurisdiction. Such The tax shall be imposed and collected as provided in this article.
(b) Municipal tax. -- A municipal hotel tax shall be imposed by ordinance enacted by the governing body of the municipality, in accordance with the provisions of article eleven, chapter eight of this code. Such The tax shall be imposed uniformly throughout the municipality; and the tax shall apply to all hotels located within the corporate limits of the municipality, including hotels owned by the state or by any political subdivision of this state.
(c) County tax. -- A county hotel tax shall be imposed by order of the county commission duly entered of record. Such The tax shall be imposed uniformly throughout the county: Provided, That no county commission may impose its tax on hotels located within the corporate limits of any municipality situated, in whole or in part, within the county: Provided, however, That the tax collected by a hotel owned by a municipality but located outside the corporate limits of such the municipality pursuant to this article shall be remitted to the municipality owning such the hotel for expenditure pursuant to the provisions of section fourteen of this article. The tax shall apply to all hotels located outside the corporate limits of a municipality, including hotels owned by the state or any political subdivision of this state.
(d) The tax shall be imposed on the consumer and shall be collected by the hotel operator as part of the consideration paid for the occupancy of a hotel room: Provided, That the tax shall may not be imposed on any consumer occupying a hotel room for thirty or more consecutive days.
(e) The rate of the local privilege tax imposed by this section shall be three percent of the consideration paid for the use or occupancy of a hotel room. The consideration may not include the amount of tax imposed on the transaction under article fifteen, chapter eleven of this code, or charges for meals, valet service, room service, telephone service or other charges or consideration not paid for use or occupancy of a hotel room.
§7-18-2. State hotel occupancy tax.
The rate of tax imposed shall be three percent of the consideration paid for the use or occupancy of a hotel room. Such consideration shall not include the amount of tax imposed on the transaction under article fifteen, chapter eleven of this code, or charges for meals, valet service, room service, telephone service or other charges or consideration not paid for use or occupancy of a hotel room. (a) On or after the first day of July, two thousand one, a state privilege tax upon the occupancy of hotel rooms in the state, at hotels which have fewer than four hundred rooms, is levied at the rate of three percent of the consideration paid for the use or occupancy of a hotel room.
(b) The proceeds of the tax shall be paid over to a fund to be called "The Tourist Business Development Fund" to be appropriated for development of new or expanded tourist destinations and the packaging of public and private tourist destinations by seasons of the year, by highway corridors and their development areas, and by the type of tourists to be encouraged to go to public and private tourist destinations in the state.
(c) Funds shall be appropriated for all areas of the state with priority for any one year's expenditure or expenditures to areas with greatest likelihood for successful new and expanded tourist destinations to increase on a permanent basis the economic activity of the areas where those tourist destinations are located, pursuant to the long term goals throughout the state of increasing the formation of new local business capital, increasing the number of successful local entrepreneurs, attracting and creating new capital resources and investment for tourist and other businesses, helping communities and regional development areas to be revitalized in the character of their special nature and place in order to support and enhance new and expanded tourist destinations, making West Virginia the short stay or weekend tourist destination which annually attracts the largest number of tourists in the eastern United States, and the development of one or several national family theme parks in the state, for a variety of tourists in more than one season of the year. One theme park is to be encouraged to be located in the area of the counties of Hancock, Brooke, Ohio and Marshall; one theme park is to be encouraged to be located in the area of the counties of Jefferson, Berkeley, Morgan, Hampshire, Mineral, Hardy, Grant, Tucker, Preston or Monongalia; and one theme park is to be encouraged in or near the center of the state accessible by four-lane highways including interstate 79, United States route 19, corridor H and United States route 50, with one or more sites or different parks in the area of the counties of Nicholas, Braxton, Webster, Clay, Fayette, Raleigh and Mercer. The tourist destination sites are to be planned and located to increase use of other tourist destinations and tourist service businesses of the state within a three-hour motor vehicle trip of each new park.
(d) The tax shall be imposed on the consumer and shall be collected by the hotel operator as part of the consideration paid for the occupancy of a hotel room: Provided, That the tax may not be imposed on any consumer occupying a hotel room for thirty or more consecutive days.
§7-18-3. Definitions.
For the purposes of this article:
(a) "Consideration paid" or "consideration" means the amount received in money, credits, property or other consideration for or in exchange for the right to occupy a hotel room as herein defined.
(b) "Consumer" means a person who pays the consideration for the use or occupancy of a hotel room. The term "consumer" shall may not be construed to mean the government of the United States of America, its agencies or instrumentalities, or the government of the state of West Virginia or political subdivisions thereof, in accordance with the terms of section five of this article.
(c) "Hotel" means any facility, building or buildings, publicly or privately owned (including a facility located in a state, county or municipal park), in which the public may, for a consideration, obtain sleeping accommodations. The term shall include, but not be limited to, boarding houses, hotels, motels, inns, courts, condominiums, lodges, cabins and tourist homes. The term "hotel" shall include state, county and city parks offering accommodations as herein set forth. The term "hotel" shall may not be construed to mean any hospital, sanitarium, extended care facility, nursing home or university or college housing unit, or any facility providing fewer than three in private homes, not exceeding a total of ten days in a calendar year, nor any tent, trailer or camper campsites: Provided, That where a university or college housing unit provides sleeping accommodations for the general nonstudent public for a consideration, the term "hotel" shall, if otherwise applicable, apply to such the accommodations for the purposes of this tax.
(d) "Hotel operator" means the person who is proprietor of a hotel, whether in the capacity of owner, lessee, mortgagee in possession, licensee, trustee in possession, trustee in bankruptcy, receiver, executor or in any other capacity. Where the hotel operator performs his or her functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed considered a hotel operator for the purposes of this article and shall have the same duties and liabilities as his or her principal. Compliance with the provisions of this article by either the principal or the managing agent shall, however, be considered to be compliance by both.
(e) "Hotel room" means any room or suite of rooms or other facility affording sleeping accommodations to the general public and situated within a hotel. The term "hotel room" shall may not be construed to mean a banquet room, meeting room or any other room not primarily used for, or in conjunction with, sleeping accommodations.
(f) "Person" means any individual, firm, partnership, joint venture, association, syndicate, social club, fraternal organization, joint stock company, receiver, corporation, guardian, trust, business trust, trustee, committee, estate, executor, administrator or any other group or combination acting as a unit.
(g) "State park" means any state-owned facility which is part of this state's park and recreation system established pursuant to this code. For purposes of this article, any recreational facility otherwise qualifying as a "hotel" and situated within a state park shall be deemed considered to be solely within the county in which the building or buildings comprising said facility are physically situated, notwithstanding the fact that the state park within which said the facility is located may lie within the jurisdiction of more than one county.
(h) "Tax," "taxes" or "this tax" means the a hotel occupancy tax authorized by this article.
(i) "Taxing authority" means the state tax commissioner or a municipality or county levying or imposing the tax authorized by this article.
(j) "Taxpayer" means any person liable for the tax taxes authorized by this article.
§7-18-4. Consumer to pay tax; hotel or hotel operator not to represent that it will absorb tax; accounting by hotel.

(a) The consumer shall pay to the hotel operator the amount of tax taxes imposed by any municipality or county hereunder, which tax taxes shall be added to and shall constitute a part of the consideration paid for the use and occupancy of the hotel room, and which tax shall be collectible as such by the hotel operator who shall account for, and remit to the state tax commissioner and the local taxing authority, all the taxes paid by consumers. The hotel operator shall separately state the amounts of the tax or taxes authorized by this article on all bills, invoices, accounts, books of account and records relating to consideration paid for occupancy or use of a hotel room. The hotel operator may commingle taxes collected hereunder with the proceeds of the rental of hotel accommodations unless the taxing authority shall, by ordinance, order, regulation or otherwise require in writing the hotel operator to segregate such the taxes collected from such the proceeds. The taxing authority's claim shall be enforceable against, and shall be superior to, all other claims against the moneys so commingled excepting only claims of the state for moneys held by the hotel pursuant to the provisions of article fifteen, chapter eleven of this code. All taxes collected pursuant to the provisions of this article shall be deemed considered to be held in trust by the hotel until the same shall have been remitted to the taxing authority as hereinafter provided.
(b) A hotel or hotel operator shall not represent to the public in any manner, directly or indirectly, that it will absorb all or any part of the tax or that the tax is not to be considered an element in the price to be collected from the consumer.
§7-18-5. Occupancy billed to government agencies or employees.
(a) Hotel room occupancy billed directly to the federal government shall be exempt from this tax the taxes imposed pursuant to this article: Provided, That rooms paid for by a federal government employee for which reimbursement is made shall be subject to this tax the taxes imposed pursuant to this section.
(b) Hotel room occupancy billed directly to this state or its political subdivisions shall be exempt from this tax the taxes imposed pursuant to this article: Provided, That rooms paid for by an employee of this state for which reimbursement is made shall be subject to this tax the taxes imposed pursuant to this article.
§7-18-8. Failure to collect or remit tax; liability of hotel operator.

If any hotel operator fails to collect the tax taxes authorized by this article and levied pursuant to municipal ordinance or order of the county commission or shall fail to properly remit such the tax to the taxing authority, he or she shall be personally liable for such the amount as that he or she failed to collect or remit: Provided, That such the hotel operator shall may not be held liable for failure to collect such the tax if the hotel operator can by good and substantial evidence prove the refusal of the purchaser to pay this the tax despite the diligent effort in good faith of the hotel operator to collect the tax.
§7-18-9. Total amount collected to be remitted.
No profit shall may accrue to any person as a result of the collection of the tax taxes authorized under this article. Notwithstanding that the total amount of such the taxes collected by a hotel operator may be in excess of the amount for which a consumer would be liable by the application of the levy of three percent for the occupancy of a hotel room or rooms, the total amount of all taxes collected by any hotel operator shall be remitted to the taxing authority as hereinafter provided.
§7-18-10. Tax return and payment.
The state privilege tax and, unless otherwise provided by ordinance, order, rule or regulation of the local taxing authority, the local privilege tax authorized by this article, if imposed or levied by any municipality or county, shall be due and payable in monthly installments on or before the fifteenth day of the calendar month next succeeding the month in which the tax accrued: Provided, That for credit sales in which the tax authorized by this article is not collected by the hotel operator at the time of such the sales, such the tax shall may not, for purposes of this article, be regarded as having accrued until the date on which it is either received by the hotel operator or upon the expiration of the thirty day payment period set forth in section six of this article, whichever shall first occur. The hotel operator shall, on or before the fifteenth day of each month, prepare and deliver to the taxing authority a return for the preceding month, in the form prescribed by the taxing authority. Such The form shall include all information necessary for the computation, collection and subsequent distribution of the tax as the taxing authority may require. A remittance for the amount of the tax due shall accompany each return. Each return shall be signed by the hotel operator or his or her duly authorized agent.
§7-18-13. General procedure and administration.
(a) The state tax commissioner shall promulgate rules and the taxing authority shall promulgate, by ordinance, order, rule or regulation, administrative procedures for the assessment, collection and refund of the tax authorized by this article. In the case of a county, the sheriff of that county shall be is the county's agent for administration and collection of the tax and shall have the power to distrain property and to initiate civil suits for collection of this tax. The county commission may promulgate such regulations and return forms as may be necessary or desirable for the administration and collection of the tax.
(b) The state tax commissioner and county assessor shall have the power and the duty to issue tax returns and to receive tax returns. for this tax
(c) In any dispute arising among or between cities or counties or cites and counties as to jurisdiction to tax or apportionment of taxes collected, the tax commissioner may by ruling or regulation decide such disputes the dispute.
(d) Notwithstanding any other provisions of this section, taxing authorities may, in accordance with the provisions of article twenty-three, chapter eight of this code, enter into agreements among and between such taxing authorities for the collection or administration of this tax.
(e) Notwithstanding any other provisions of this section, taxing authorities may in accordance with the provisions of article twenty-three, chapter eight of this code, enter into agreements with the tax commissioner for auditing services: Provided, That the taxing authorities shall pay to the tax commissioner the reasonable cost of such the audits.
(f) The state tax commissioner shall collect the state privilege tax levied by this article, and shall promulgate rules for administration of the tax pursuant to article three, chapter twenty-nine of this code. The rules shall provide for a single reporting form for each hotel operator where a local privilege tax is to be collected at the same time as the state privilege tax, with payments to be made separately to the local authority and the state tax commissioner.
§7-18-13a. Annual reports by convention and visitor's bureaus.
Each year, on or before the fifteenth day of August, every convention and visitor's bureau which receives any appropriation of hotel occupancy tax from one or more counties or municipalities shall file with each such county or municipality and the division of tourism a statement, including an income statement and balance sheet, showing all amounts of hotel occupancy tax appropriated to the convention and visitor's bureau and all expenditures of hotel occupancy tax made by the convention and visitor's bureau for the prior fiscal year.
§7-18-14. Proceeds of tax; application of proceeds.
(a) Application of proceeds. -- The net proceeds of the tax collected and remitted to the local taxing authority pursuant to this article shall be deposited into the general revenue fund of such the municipality or county commission and, after appropriation thereof, shall be expended only as provided in subsections (b) and (c) of this section.
(b) Required expenditures. -- At least fifty percent of the net revenue receivable during the fiscal year by a county or a municipality pursuant to this article shall be expended in the following manner for the promotion of conventions and tourism:
(1) Municipalities. -- If a convention and visitor's bureau is located within the municipality, county or region, the governing body of such the municipality shall appropriate the percentage required by this subsection to that bureau. If a convention and visitor's bureau is not located within such the municipality, county or region, then the percentage appropriation required by this subsection shall be appropriated as follows:
(i) Any hotel located within such the municipality, county or region may apply to such the municipality for an appropriation to such the hotel of a portion of the local privilege tax authorized by this article and collected by such the hotel and remitted to such the municipality, for uses directly related to the promotion of tourism and travel, including advertising, salaries, travel, office expenses, publications and similar expenses. The portion of such the tax allocable to such the hotel shall may not exceed seventy-five percent of that portion of such the tax collected and remitted by such the hotel which is required to be expended pursuant to this subsection: Provided, That prior to appropriating any moneys to such the hotel such the municipality shall require the submission of, and give approval to, a budget setting forth the proposed uses of such the moneys.
(ii) If there is more than one convention and visitor's bureau located within a municipality, county or region, the city council may allocate the tax authorized by this article to one or more of such the bureaus in such portion as the city council in its sole discretion determines.
(iii) The balance of net revenue required to be expended by this subsection shall be appropriated to the regional travel council serving the area in which the municipality is located.
(2) Counties. -- If a convention and visitor's bureau is located within a county or region, the county commission shall appropriate the percentage required by this subsection to that convention and visitor's bureau. If a convention and visitor's bureau is not located within such the county or region, then the percentage appropriation required by this subsection shall be appropriated as follows:
(i) Any hotel located within such the county or region may apply to such the county for an appropriation to such the hotel of a portion of the tax authorized by this article and collected by such the hotel and remitted to such the county, for uses directly related to the promotion of tourism and travel, including advertising, salaries, travel, office expenses, publications and similar expenses. The portion of such the tax allocable to such the hotel shall not exceed seventy-five percent of that portion of such the tax collected and remitted by such the hotel which is required to be expended pursuant to this subsection: Provided, That prior to appropriating any moneys to such the hotel such the county shall require the submission of, and give approval to, a budget setting forth the proposed uses of such the moneys.
(ii) If there is more than one convention and visitor's bureau located within a county or region, the county commission may allocate the tax authorized by this article to one or more of such the bureaus in such portion as the county commission in its sole discretion determines.
(iii) The balance of net revenue required to be expended by this subsection shall be appropriated to the regional travel council serving the area in which the county is located.
(3) Legislative finding. -- The Legislature hereby finds that the support of convention and visitor's bureaus which have substantial economic impact in their communities and areas, hotels and regional travel councils is a public purpose for which funds may be expended. Local convention and visitor's bureaus, hotels and regional travel councils receiving funds under this subsection may expend such the funds for the payment of administrative expenses, and for the direct or indirect promotion of conventions and tourism, and for any other uses and purposes authorized by subdivisions (1) and (2) of this subsection.
(c) Permissible expenditures. -- After making the appropriation required by subsection (b) of this section, the remaining portion of the net revenues receivable during the fiscal year by such the county or municipality, pursuant to this article, may be expended for one or more of the purposes set forth in this subsection, but for no other purpose. The purposes for which expenditures may be made pursuant to this subsection are as follows:
(1) The planning, construction, reconstruction, establishment, acquisition, improvement, renovation, extension, enlargement, equipment, maintenance, repair and operation of publicly owned convention facilities, including, but not limited to, arenas, auditoriums, civic centers and convention centers;
(2) The payment of principal or interest or both on revenue bonds issued to finance such the convention facilities;
(3) The promotion of conventions;
(4) The construction, operation or maintenance of public parks, tourist information centers and recreation facilities (including land acquisition);
(5) The promotion of the arts;
(6) Historic sites;
(7) Beautification projects; or
(8) Medical care, in an amount not exceeding one hundred thousand dollars, in any county where: (i) There is an urgent necessity to preserve the delivery of acute medical care services; (ii) there is an increase in need for acute medical care services directly related to tourism; (iii) recurrent flooding in the county significantly disrupts, on a periodic basis, the delivery of acute medical care services; (iv) there is an inadequate economic base within the county from any source other than tourism to preserve the delivery of acute medical care services; (v) there is an inadequate economic base directly related to low population in the county, specifically, a population of less than ten thousand persons according to the census of the year one thousand nine hundred ninety; and (vi) there is one and only one hospital within the county; and the county commission makes specific findings, by resolution, that all of the foregoing conditions within the county exist.
(d) Definitions. -- For purposes of this section, the following terms are defined:
(1) Convention and visitor's bureau and visitor's and convention bureau. -- "Convention and visitor's bureau" and "visitor's and convention bureau" are interchangeable and either shall mean a nonstock, nonprofit corporation with a full-time staff working exclusively to promote tourism and to attract conventions, conferences and visitors to the municipality, county or region in which such the convention and visitor's bureau or visitor's and convention bureau is located or engaged in business within.
(2) Convention center. -- "Convention center" means a convention facility owned by the state, a county, a municipality or other public entity or instrumentality and shall include all facilities, including armories, commercial, office, community service and parking facilities and publicly owned facilities constructed or used for the accommodation and entertainment of tourist and visitors, constructed in conjunction with the convention center and forming reasonable appurtenances thereto.
(3) Fiscal year. -- "Fiscal year" means the year beginning the first day of July and ending the thirtieth day of June of the next calendar year.
(4) Net proceeds. -- "Net proceeds" means the gross amount of tax collections less the amount of tax lawfully refunded.
(5) Promotion of the arts. -- "Promotion of the arts" means activity to promote public appreciation and interest in one or more of the arts. It includes the promotion of music for all types, the dramatic arts, dancing, painting and the creative arts through shows, exhibits, festivals, concerts, musicals and plays.
(6) Recreational facilities. -- "Recreational facilities" means and includes any public park, parkway, playground, public recreation center, athletic field, sports arena, stadium, skating rink or arena, golf course, tennis courts and other park and recreation facilities, whether of a like or different nature, that are owned by a county or municipality.
(7) Region. -- "Region" means an area consisting of one or more counties that have agreed by contract to fund a convention and visitor's bureau to promote those counties.
(8) Regional travel council. -- "Regional travel council" means a nonstock, nonprofit corporation, with a full-time staff working exclusively to promote tourism and to attract conventions, conferences and visitors to the region of this state served by the regional travel council.
(9) Historic site. -- "Historic site" means any site listed on the United States national register of historic places, or listed by a local historical landmarks commission, established under state law, when such the sites are owned by a city, a county or a nonprofit historical association and are open from time to time to accommodate visitors.
§7-18-15. Criminal penalties.
(a) It shall be unlawful for any person to willfully refuse to collect or to pay the a tax or to willfully refuse to make the a return required to be made by this article; or to willfully make any false or fraudulent return or false statement in any return with the intent to defraud any taxing authority, or to willfully evade the payment of the a tax, or any part thereof; or for any person to willfully aid or abet another in any attempt to evade the payment of the tax, or any part thereof; or for any officer, partner or principal of any corporation or association to willfully make or willfully permit to be made for such the corporation or association any false return, or any false statement in any return authorized by this article, with the intent to evade the payment of this a tax.
(b) Any person willfully violating any of the provisions of this article shall for the first offense be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than five hundred dollars or imprisoned for a period of not more than thirty days, or both fined and imprisoned. For each offense after the first offense, such the person shall be guilty of a felony, and, upon conviction thereof, shall be fined not less than one thousand dollars nor more than ten thousand dollars, or imprisoned in the penitentiary state correctional facility not less than one nor more than three years, or in the discretion of the court be confined in the county or regional jail not more than one year, or both fined and imprisoned.
(c) Every prosecution for any offense arising under this article shall be commenced within three years after the offense was committed, notwithstanding any provision of this code to the contrary.
(d) Proceedings against any person under this section shall be initiated in the county of this state wherein such the person resides if any element of the offense occurs in such the county of residence, or if no element of the offense occurs in such the county of residence, then in the county where the offense was committed.
(e) For purposes of this section, the term:
(1) "Willfully" means the intentional violation of a known legal duty to perform any act, required to be performed by any provision of this article, in respect of which the violation occurs: Provided, That the mere failure to perform any act shall not be a willful violation under this article. A willful violation of this article requires that the defendant have had knowledge of or notice of a duty to perform such the act, and that the defendant, with knowledge of or notice of such the duty, intentionally failed to perform such the act.
(2) "Evade" means to willfully and fraudulently commit any act with the intent of depriving the state or local government of payment of any tax which there is a known legal duty to pay.
(3) "Fraud" means any false representation or concealment as to any material fact made by any person with the knowledge that it is not true and correct, with the intention that such the representation or concealment be relied upon by the state.


NOTE: The purpose of this bill is to create a state privilege tax on hotel occupancy, the proceeds of which are to be used for a Tourist Business Development Fund.

 Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.