The bill amends Washington state law to clarify and expand the authority of municipalities and public facilities districts to impose excise taxes on lodging. It allows municipalities to impose a lodging tax of up to 12 percent, with a minimum increment of tenths of a percent, while cities with populations of 200,000 or more in counties with populations of 500,000 or more can set a tax rate of up to 15.2 percent. Public facilities districts are also granted the authority to impose a lodging excise tax, with exemptions for smaller lodging facilities and a maximum rate of 2 percent, or up to 7 percent in designated areas. The bill introduces definitions for terms such as "short-term rental" and "hostel," and outlines the conditions for tax collection and distribution, ensuring that the Department of Revenue collects these taxes at no cost to the districts.

Additionally, the bill establishes that public facilities districts must make quarterly payments to cities that have repealed taxes on short-term rental operators, based on revenues from lodging taxes related to these activities. These payments are designated for community-initiated equitable development and affordable housing programs. Furthermore, it mandates that 50% of tax revenue collected by public facilities districts be distributed to the county where the convention and trade center is located, with specific guidelines for the use of these funds. The bill also includes various clarifications and updates to existing legal language, such as changing population thresholds and tax rates, to streamline the tax collection process and ensure funds are directed towards community development initiatives.

Statutes affected:
Original bill: 67.28.181, 82.14.530, 36.100.040