Lodging Tax Legislation Overview in Albuquerque
Lodging tax legislation in Albuquerque includes a 5% lodgers tax and 1% hospitality fee imposed on room revenue. Revenues collected are used for advertising, promoting tourist facilities, and acquiring new attractions. The city also amended ordinances in 2019 to include responsibilities for marketplace providers like Airbnb. Delinquency rates for lodging establishments are low, with a lien in place for only 3 establishments.
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Tuesday, February 4, 2020 Cilia Aglialoro - Treasurer Alan Varela Assistant City Attorney City of Albuquerque 1
Overview of Lodging Tax Legislation Lodging Establishments State of the Industry Revenue Trends Uses of Revenues Lodger s Tax Advisory Board New Tax Collection System 2
Per City Ordinance, the City Collects from all Lodging Establishments within the City: 5% - Lodgers Tax on all room revenue per City Ordinance, Section 4-4-1 et seq. ROA 1994 1% - Hospitality Fee on all room revenue per City Ordinance, Section 4-1-1 et seq. ROA 1994 Revenues are due on the 25th day of each month for prior month and collected by the City s Treasury Division 3
Per City Ordinance, revenues can be used as follows: Advertising, publicizing and promoting certain recreational and tourist-related facilities; and Acquiring or constructing tourist-related facilities, attractions or transportation systems 4
Lodgers Tax Revenues (5% imposed) No less than 50% of proceeds: Promotion of tourist-related attractions, facilities and events Balance of proceeds: Payment of principal and interest on outstanding bonds, acquisition and construction, tax administration, audits, police and fire protection, and sanitation. No Sunset provision on Lodgers Tax Hospitality Fee Revenues (1% imposed) 50% of proceeds: Promotion of tourist-related attractions, facilities and events 50% of proceeds: Equip and furnish the Albuquerque Convention Center (Pay-As-You-Go, and Bonds) Sunset provision: Hospitality Fee expires July 1, 2028 5
Albuquerque amended its Lodgers Tax and Hospitality Fee Ordinances in September 2019, with an effective date of January 1, 2020, to make the following changes: Added a definition for a Marketplace Provider (i.e. online booking platforms such as Airbnb, Expedia/VRBO, Booking.com) Removed the three room exemption Imposed the responsibilities of a Marketplace Provider, including the collection of occupancy taxes and hospitality fees and the provision of the following data: the names of the persons responsible for each such listing, the address of each such listing, the length of stay for each such listing, and the price for each stay 6
167 Lodging Establishments 3 establishments are delinquent Lien in place, payment contract, or in negotiations with City Legal. 0.5% delinquency rate (based on amount owed/budgeted amount) very low AIRBNB City entered into a voluntary agreement with AirBNB in October 2017 Expedia/VRBO City entered into a voluntary agreement with Expedia/VRBO in August 2019 7
Hospitality employment at an all-time high Lodgers Tax collections: Increased 10.79% between FY18 & FY19 Increased 9.05% between July, 2019 through November, 2019 Hospitality Fee Collections: Increased 10.79% between FY18 & FY19 Increased 9.05% between July, 2019 through November, 2019 An increase in business meetings, conventions, and sports events in Albuquerque have bolstered Lodgers tax and Hospitality fee revenues 2019 hotel occupancy (67.8%) grew 4.9% relative to 2018 meanwhile national occupancy declined slightly from 2018 to 2019 2019 hotel average daily rate ($89.17) grew 5.3% relative to 2018 Demand for Albuquerque hotels rooms grew 3.5% from 2018 to 2019
$13.7 mm Budgeted FY 20 $13.7 mm Budgeted FY 20 Lodger's Tax Monthly Total Revenue $2,000,000.00 $6.7 mm year to date November 2019 $6.7 mm year to date July, 2019 November 2019 $1,800,000.00 July, 2019 $1,600,000.00 $1,400,000.00 $1,200,000.00 10.79% YTD Cumulative Growth in FY 18 vs FY19 10.79% YTD Cumulative Growth in FY 18 vs FY19 $1,000,000.00 $800,000.00 $600,000.00 $400,000.00 $200,000.00 $- JULY SEPTEMBER NOVEMBER JANUARY MARCH MAY FY 19 FY 20 9
Lodger's Tax Revenue Summary Fiscal Year 2019 November, 2018 Fiscal Year 2020 November, 2019 Revenue $ Difference (+)/(-) % Difference (+)/(-) Current Monthly Revenue Delinquent Monthly Revenue AIRBNB / VRBO Total Monthly Revenue $ 911,660.16 649.12 32,664.15 944,973.43 $ 965,213.13 43,216.19 41,319.26 1,049,748.58 $ 53,552.97 42,567.07 8,655.11 104,775.15 5.87% 6557.66% 26.50% 11.09% - July, 2018 - Nov, 2018 $ July, 2019 - Nov, 2019 $ Cumulative Total Revenue 6,208,505.34 6,770,295.77 $ 561,790.43 9.05% Cumulative Total Revenue (No Airbnb / VRBO/Homeway) $ 6,025,628.30 $ 6,529,267.97 $ 503,639.67 8.36% FY 19 Total Revenue 1,220,378.69 $ 1,141,284.91 1,240,632.63 1,661,235.68 944,973.43 881,067.62 870,542.44 1,032,742.37 1,373,750.82 1,279,368.22 1,328,019.95 1,500,158.38 14,474,155.14 $ FY 19 Current Revenue 1,182,696.07 $ 1,100,980.10 1,195,057.48 1,619,363.84 911,660.16 829,076.10 798,039.61 901,890.12 1,311,042.66 1,232,612.99 1,278,720.90 1,440,142.87 13,801,282.90 $ FY19 Airbnb Revenue 37,265.95 $ 40,304.81 35,573.17 37,068.96 32,664.15 31,962.88 48,816.63 44,608.96 52,979.82 46,076.86 47,836.59 46,443.11 501,601.89 $ FY19 FY 20 Total Revenue 1,314,386.54 $ 1,255,848.26 1,364,867.47 1,785,444.92 1,049,748.58 FY20 Current Revenue 1,266,091.09 $ 1,171,534.01 1,269,025.69 1,735,824.97 965,213.13 FY20 Airbnb Revenue 47,878.78 $ 52,634.76 49,991.72 47,371.73 37,658.03 FY20 FY20 Monthly Comparison Current Revenue FY 2019 vs 2020 83,395.02 $ 70,553.91 73,968.21 116,461.13 53,552.97 Monthly Current Comparison % Cum. Current YTD Surplus/(Deficit) FY 2019 vs 2020 $ 153,948.93 227,917.14 344,378.27 397,931.24 YTD Cum. Current % Change FY 2019 vs 2020 7.05% 6.74% 6.55% 6.76% 6.62% Monthly Total Comparison % FY 2019 vs 2020 7.70% 10.04% 10.01% 7.48% 11.09% YTD Cum % Change Total FY 2019 vs 2020 7.70% 8.83% 9.24% 8.68% 9.05% VRBO/Homeaway YTD Cum % Change Total FY 2019 vs FY 2020 7.05% 8.13% 8.47% 7.97% 8.36% Delinquent Revenue $ 10,001.98 4,802.88 20,028.64 23,686.20 86,243.29 9,728.34 1,462.46 13,572.40 171,270.35 $ VRBO/HomeAwy Revenue $ 1,831.55 3,661.23 Delinquent Revenue $ 31,679.49 45,850.06 43,216.19 Months JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE TOTAL 416.67 - - - 416.67 7.05% 6.41% 6.19% 7.19% 5.87% 83,395.02 - 416.67 649.12 678.37 6,770,295.77 $ 6,407,688.89 $ 235,535.02 $ $ 5,492.78 121,579.08 $ $ 397,931.24 Adjustments FINAL CAFR TOTAL BUDGET 13,540,000.00 $ 13,681,000.00 $ 10
$2.736 mm Budgeted FY 20 $2.736 mm Budgeted FY 20 Hospitality Fee Monthly Total Revenue $400,000.00 $1.354 mm year to date November 2019 $1.354 mm year to date July, 2019 November 2019 $350,000.00 July, 2019 $300,000.00 $250,000.00 $200,000.00 10.79% YTD Cumulative Growth in FY 18 vs FY19 10.79% YTD Cumulative Growth in FY 18 vs FY19 $150,000.00 $100,000.00 $50,000.00 $- FY 19 FY 20 11
Hospitality Fee Revenue Summary Fiscal Year 2019 November, 2018 Fiscal Year 2020 November, 2019 Revenue $ Difference (+)/(-) % Difference (+)/(-) Current Monthly Revenue Delinquent Monthly Revenue AIRBNB / VRBO Total Monthly Revenue $ 182,332.01 129.82 6,532.83 188,994.66 $ 193,042.64 8,643.24 8,263.86 209,949.74 $ 10,710.63 8,513.42 1,731.03 20,955.08 5.87% 6557.86% 26.50% 11.09% - July, 2018 - Nov, 2018 $ $ July, 2019 - Nov, 2019 $ $ Cumulative Total Revenue Cumulative Total Revenue (No Airbnb / VRBO/Homeway) 1,241,701.04 1,205,125.64 1,354,059.09 1,305,853.52 $ $ 112,358.05 100,727.88 9.05% 8.36% 12
50% - Promoting , Publicizing and Advertising The City contracts with the following vendors to promote City tourism: Visit ABQ Albuquerque Hispano Chamber of Commerce Indian Pueblo Cultural Center National Hispanic Cultural Center American Indian Chamber of Commerce 50% - Construction & Acquisition of Tourist Facilities Payment of principal and interest on Lodgers Tax/Hospitality Fee outstanding bonds - $107,505,000 New Money - Convention Center Improvements, Entertainment District parking garage, Sports Tourism facilities, etc. Refinancings of old debt for debt service savings 13
Advisory/Oversight Board Consists of seven (7) members all of whom shall be: Residents of the city Appointed by the Mayor with the advice of the City Council Term of each member of the Board shall be for three (3) years Advisory/Oversight Board Two (2) of whom shall represent the lodging industry Two (2) of whom are directly involved in tourist related industries Three (3) members at large who shall represent the public Legal Purpose of Board Advise the Mayor and City Council on the expenditure of funds authorized by Section 3-38-15, NMSA 1978, as follows: Legal Purpose of Board Review past and current performance of contractors for advertising, publicizing and promoting tourist attractions, conventions and tourist related activity Advise the Mayor as to the performance of such contractors on a quarterly basis and make recommendations to the Mayor concerning whether such contracts should be renewed or canceled Does NOT include planning or overseeing tax expenditures for capital projects 14
Adopt an Ordinance for: Lodgers Tax (5%) Hospitality Fees (1%) See examples from City of Albuquerque Obtain a listing of current hotels/motels Chamber of commerce Send an application to collect information required by your ordinance and state statute to each lodging establishment Accounts Receivable System Tells who owes taxes/fees and how much they owe; Mail in payment Entity will send invoice to lodging establishment for payment Pay Online Lodging establishment pays online with credit care or Echeck (debit checking accounts) Establish a Lodging Advisory Committee to: Oversee advertising and promotion expenditures of Lodger s Tax/Hospitality Fee collections Review performance of contractors/vendors hired to promote tourism within entities jurisdiction Adopt an Ordinance for: Obtain a listing of current hotels/motels Accounts Receivable System Establish a Lodging Advisory Committee to: 15
Delinquent Taxes Staff will need to follow up with establishments that are delinquent in taxes Add penalty for each month late Add interest for each month late File lien if delinquent more than 1 month Payment plan available to lodging establishments Delinquent Taxes 16
Questions? 17
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