SENATE URBAN POLICY AND PLANNING COMMITTEE

STATEMENT TO

SENATE, No. 293

STATE OF NEW JERSEY

DATED: FEBRUARY 22, 1996

      The Senate Urban Policy and Planning Committee reports favorably Senate Bill No. 293.

      Senate Bill No. 293 provides that a hotel in an eligible municipality must separately state the tourism promotion fees to guests and that such fees are not includible in the taxable room rent for New Jersey sales and use tax and Atlantic City luxury tax purposes. The bill is retroactive to March 1, 1992, the first day of the first full month in which hotel rentals were subject to the tourism promotion fees, and applies to all taxes that are uncollected since that date.

      It is the committee's understanding that the fee authorized pursuant to the section being amended has not been collected to date. Because the authorization exists, however, there is some concern on the part of hotels in eligible municipalities that the Division of Taxation may expect higher sales and luxury tax proceeds from those hotels because of the existence of the fee authorization. Accordingly, it is the purpose of this bill to establish not only that the fee shall not be included in the taxable hotel bill prospectively, but that the hotels subject to the fee shall not be responsible for the additional uncollected taxes which otherwise would have been collected since March 1, 1992, the effective date of P.L.1991, c.376.

      This bill was prefiled for introduction in the 1996-97 session pending technical review. As reported, the bill includes the changes required by technical review which has been performed.