HB 1216: Revenue and taxation; require that any excise tax on rooms, lodgings, and accommodations be remitted to the Department of Revenue for disbursement

Currently, counties and cities that levy the excise tax on hotel rooms, lodgings, and short-term accommodations collect that tax themselves and spend it according to their own arrangements with tourism groups and other partners. House Bill 1216 changes that process by requiring innkeepers to remit the tax to the state Department of Revenue instead of to the local government that imposed it. Counties and municipalities would have to give the department copies of their contracts and memoranda of understanding that spell out how the tax proceeds should be spent. The department would then disburse the money to the county, municipality, tourism marketing organization, or other designated recipient according to those agreements, and would flag how much of each disbursement must go toward tourism product development. The bill also updates related sections on tax returns, extensions, and penalties so they reference the department instead of local governing authorities. It also requires reporting to both the Department of Revenue and the Department of Community Affairs. The changes would apply to taxable years beginning on or after January 1, 2027.

• Requires innkeepers to remit hotel, lodging, and accommodation excise taxes to the Department of Revenue instead of the county or municipality that imposed the tax.
• Requires counties and municipalities to submit their contracts and memoranda of understanding on tax spending to the department so it can disburse funds accordingly.
• Directs the department to disburse tax proceeds to counties, municipalities, tourism marketing organizations, or other designated recipients, with a required line item for tourism product development.
• Gives the state revenue commissioner authority to write rules, regulations, and forms for administering the new remittance and disbursement system.
• Updates related tax return, extension, and penalty provisions in the code so innkeepers deal with the department rather than local governing authorities.
• Adds a requirement that annual tax reports also be filed with the Department of Revenue, in addition to the existing filing with the Department of Community Affairs.

Hotel, motel, and short-term rental operators (innkeepers) who collect the tax from guests; county and municipal governments that currently levy and manage this tax; tourism marketing organizations and other groups that receive tax proceeds under local contracts; and the Department of Revenue, which takes on new collection and disbursement duties.

Local governments would lose direct control over collecting and holding this tax revenue, instead depending on the Department of Revenue to disburse funds according to submitted contracts. This could add administrative steps and delay for tourism and hotel tax money that funds conventions, tourism promotion, and related local projects.

• Section 1 creates new Code Section 48-13-50.5, requiring all excise tax on rooms and lodgings to be remitted to the Department of Revenue instead of the local county or municipality.
• Section 1 requires counties and municipalities to submit contracts and memoranda of understanding governing how tax proceeds are spent, so the department can disburse funds accordingly and flag amounts for tourism product development.
• Section 1 gives the revenue commissioner rulemaking authority to administer and enforce the new remittance and disbursement system.
• Sections 2 through 6 revise multiple existing Code sections (48-13-51, 48-13-53, 48-13-53.2, 48-13-53.3, 48-13-54) to redirect tax remittances, returns, and extensions from local governing authorities to the Department of Revenue.
• Section 7 requires counties and municipalities to also file their annual tax reports with the Department of Revenue in addition to the Department of Community Affairs.
• Section 10 sets the effective date as upon the Governor's approval, applicable to taxable years beginning on or after January 1, 2027.

1. 2026-02-09House Second Readers (House)
2. 2026-02-06House First Readers (House)
3. 2026-02-05House Hopper (House)

• Ron Stephens (R, HD-164)Primary sponsor
• Gerald Greene (R, HD-154)
• Kasey Carpenter (R, HD-004)
• Katie Dempsey (R, HD-013)
• Anissa Jones (D, HD-143)
• Lehman Franklin (R, HD-160)

• hotel and motel tax
• tourism funding
• local government revenue
• Department of Revenue
• excise taxes