Tourism and Recreation Businesses Targeted for Taxation Despite Drop in Demand for Travel
Despite hundreds of millions in money from the most recent economic stimulus legislation, some states and local governments are trying to add taxes to tourism and recreation businesses at a time when some in the tourism industry are struggling to survive. Recently, a bill was introduced in Montana that would give local governments the option to add a 4% tax on tourism goods and services, like lodging facilities, prepared meals, alcoholic beverages, recreational services, auto and recreational vehicle rentals. Montana received $625,913,635 from the economic stimulus bill passed in February for a wide variety of state and local programs, including education and infrastructure. But with opposition from the Farm Bureau, Montana Taxpayers Association and the Montana Tavern Association, this tax bill may be in trouble. Local governments would have the option to install the tax once authorized by the legislature. 35% of the tax would be used to offset property taxes.
In Tennessee the legislature is proposing a bill to make it more difficult for businesses to challenge taxes they believe are illegal. Taxing services and customers on navigable rivers is currently illegal, but Polk County is said to be considering another shot at taxes on rafting companies on the Ocoee River. In South Dakota the governor recently signed a tourism tax increase to benefit the arts, raising it from 1% to 1.5%.
Today’s Wall Street Journal reports shows how dramatically travel and tourism contracted in the final quarter of 2008. http://online.wsj.com/article_email/SB123750615544890121-lMyQjAxMDI5MzI3MDUyMDA2Wj.html
• Spending fell at a 22% annualized rate in the October through December quarter, compared with the prior three-month period. The decline was the sharpest since the government's quarterly records began in 2001, topping the 19% drop after the terrorist attacks that year.
• Leisure and hospitality establishments shed 33,000 jobs in February and employment in the industry has dropped to 13.2 million from 13.5 million in February 2008, according to the Labor Department.
• MGM Mirage warned earlier this week it could default on billions of dollars in loans after losing $1.14 billion in its fourth quarter because of a 17% drop in gambling revenue and a 21% drop in room revenue.
• According to the Department of Commerce shopping by tourist declined by 11.6% in the last quarter of 2008.
• Prices fell 16% from October through December at an annualized rate as more companies offered specials to boost demand.
Overall, while the private sector lost jobs in 2008, government employment expanded, according to the Bureau of Labor Statistics. In 2008, the private sector lost 3.65 million jobs, while government employment grew by nearly 150,000 in the same period. Growth in government will accelerate even faster with the funds provided through the $787 billion American Recovery and Reinvestment Act, which was signed by the President in February. The positions created by the bill may lead to higher taxes down the line to sustain them after the initial boost in spending.
A Money Saving Benefit – Free Legal Consultation on Employment Issues and Discounts on Background Checks
If you are an America Outdoors Association member with questions about issues related to employment, background checks, hiring and firing, drug free workplace issues, new employment legislation or other employment related issues, 30 minutes of free legal consultation is available to you. Contact David Brown at 865-558-3595 to gain access to this service. Check out the briefs on employment related issues under Personnel Management on the Member Resources page. Call for the password to the AOA site.
Discounts on Background Checks Now Available as a New Member Benefit. America Outdoors Association has partnered with a national firm to provide an online background check for the deeply discounted rate of $27.95. The package includes: SSN Verification with Address History, Criminal Supersearch, Sex Offender Registry of 50 States, Unlimited Single County Criminal Searches. Contact AOA for more information.
Forest Service Finalizes New Priority Use Permit
The Forest Service has a new all in one priority use permit (FS-2400-4i(02/09)) that gives line officers the options to issue it as a
• Ten year priority use permit
• Transitional priority use permit
• Or a short term priority use permit (to enable them to complete permit documentation) for up to 2 years.
The authorizing officer will check a box to identify which type of authorization is being issued.
There are some other changes to the permit, including options for invasive species management plans. We are still analyzing the new authorization and will let you know if we find any issues that need addressing. We still recommend, when signing the permit, that you submit a letter with it related to some liability clauses that are unreasonable. These clauses appear to be similar to the previous permit. The new temporary permit will not be finalized this year, so the agency will use the previous version. For more information, contact David Brown at 865-558-3595.