City council proposes new tax on hotel stays to fund tourism promotion

The Missouri State Legislature introduced House Bill 532 on April 3, 2025, aiming to empower local governments to impose a tax on transient lodging. This bill allows cities and counties to levy a tax ranging from two to five percent on charges for sleeping rooms in hotels, motels, bed and breakfast inns, campgrounds, and docking facilities that rent slips to recreational boats used for sleeping. However, the implementation of this tax is contingent upon voter approval during a state general, primary, or special election.

The primary purpose of House Bill 532 is to generate revenue specifically for the promotion of tourism within the respective localities. The bill stipulates that the tax must be clearly stated separately from other charges and taxes, ensuring transparency for consumers. Additionally, for charter cities with populations exceeding 100,000, the bill allows for a higher tax rate of five to seven percent, with proceeds also designated for the operation and development of community centers.

Debate surrounding the bill has focused on its potential economic impact. Proponents argue that the tax could significantly enhance local tourism funding, thereby boosting the economy. Critics, however, express concerns about the additional financial burden on travelers, which could deter tourism in some areas. The bill's requirement for voter approval adds a layer of democratic engagement, allowing residents to weigh in on the tax's implementation.

If passed, House Bill 532 could have substantial implications for local economies, particularly in areas reliant on tourism. Experts suggest that the additional funding could lead to improved marketing efforts and infrastructure development, ultimately attracting more visitors. However, the success of the bill hinges on public support, as local voters will have the final say on whether to adopt the proposed tax measures.

As the legislative process unfolds, stakeholders from various sectors, including tourism, hospitality, and local government, will be closely monitoring the bill's progress and its potential effects on Missouri's tourism landscape.