The bill introduces a new local government option for funding essential affordable housing programs through the imposition of a special excise tax on short-term rental lodging. Local legislative bodies, such as counties, cities, or towns, can impose this tax at a rate not exceeding four percent, which must be collected by the state department at no cost to the local governments. The tax proceeds will be deposited into an essential affordable housing local assistance account and can be used exclusively for purposes such as acquiring or constructing affordable housing, funding operations and maintenance costs, providing rental assistance, and supporting social service organizations. Additionally, local governments must adopt a resolution of intent before imposing the tax and are required to publish an annual report detailing the revenue's use.

The bill also amends existing laws regarding lodging taxes, including changes to the maximum allowable rates and the conditions under which municipalities can impose these taxes. Notably, it updates the population thresholds for certain cities and clarifies that the new excise tax will not be included in the calculation of the effective combined tax rate for lodging. The legislation aims to enhance local governments' ability to address affordable housing needs while ensuring transparency and accountability in the use of tax revenues.

Statutes affected:
Original Bill: 67.28.181, 82.14.410, 82.32.145
Substitute Bill: 64.37.010, 82.14.410
Engrossed Substitute: 64.37.010, 82.14.410