2023 Lodging Tax Expenditures

BRIEFING REPORT | JULY 2024

Geneva Johnston, Data Reporting and Visual Communications Analyst
Ryan McCord, Audit Director; Eric Thomas, Legislative Auditor

Key points

Additional data available

Information from calendar years 2014 through 2023 is available in an interactive dashboard.

Explore the data

  • Cities, towns, and counties that receive a distribution of lodging tax revenue report the data to JLARC staff.

  • The report below summarizes data for the last five years. For 2023, the municipalities report that:

    • Lodging tax revenue helped fund 1,689 tourism-related activities statewide. This includes 937 events/festivals, 369 marketing-related activities, and 283 facility-related projects.

    • They awarded $80 million in lodging tax funds for facility-related projects (52%), marketing-related activities (32%), and to events/festivals (15%).
    • Funded activities had 90 million attendees, with 41 million traveling over 50 miles, and 18 million traveling from out of state or country.
    • Statewide, 16 million attendees paid for overnight lodging, with 21 million reported paid lodging nights.

About the report

Municipalities collect and use lodging tax revenue for tourism-related activities

Cities, towns, and counties may levy a tax on lodging in two ways. Lodging includes overnight stays at hotels, motels, bed and breakfasts, RV parks, and other short-term accommodations. These municipalities may:

  1. Collect a tax of up to 2% that is taken as a credit against the state sales tax.
  2. Collect an additional sales tax of up to 2%.

The Department of Revenue (DOR) collects the lodging tax and distributes the revenue back to municipalities. Municipalities may spend their lodging tax revenue on three types of tourism-related activities under RCW 67.28.1816:

  • Tourism marketing.
  • Special events and festivals designed to attract tourists.
  • Capital expenditures for tourism-related facilities owned by the municipality.

Municipalities must report and ensure the accuracy of the data

The 2013 Legislature directed the Joint Legislative Audit and Review Committee (JLARC) to collect and report information about local use of lodging tax revenue for tourism purposes.

  • Any municipality that receives a distribution of lodging tax revenue must report information to JLARC (RCW 67.28.1816). King County is exempt from reporting (RCW 67.28.1816(2)(d)).

  • Municipalities are responsible for the accuracy of their data.

  • JLARC staff maintains an online reporting system, provides reporting guidelines, and publishes the data each year. We do not independently verify the information.

Questions about the reported information should be directed to the individual municipality. To learn more about the reporting process, please visit JLARC's Lodging Tax Data Collection page.

Part 1.
Reporting compliance

The Department of Revenue (DOR) identified 210 municipalities that received a distribution of lodging tax revenue in 2023.

  • 199 (95%) reported information to JLARC. Eleven did not.

JLARC staff summarized reporting compliance for the 210 municipalities into the following categories:

  1. Reported: the municipality received a lodging tax distribution in the current reporting year and reported lodging tax expenditures.
  2. Reported no expenditures: the municipality received a distribution of lodging tax revenue in the current reporting year and reported that it did not spend lodging tax revenue.
  3. Did not report: the municipality received a distribution of lodging tax revenue in the current reporting year but did not report whether it spent the funds.
Figure 1: 95% of municipalities that received a distribution of lodging tax revenue in 2023 reported information

Source: Data reported by municipalities

Part 2.
Statewide overview

The following exhibits summarize statewide data.

  • Details for each municipality and for previous years are in the full dataset and interactive dashboard. You can get both from the sidebar under Report Materials.

  • Descriptions of the data reported are in the Data Field Descriptions document.

Figure 2: Municipalities awarded $80 million in lodging tax revenue in 2023

Funds.svg

2019 2020 2021 2022 2023
Funds awarded by municipalities $76.4 $55.9 $51.2 $69.8 $79.9
Total activity cost (including other funds) $253.6 $133.2 $204.7 $272.1 $227.3
Funds requested for activities $68.9 $57.4 $53.4 $85.8 $80.2
values in millions
Source: Data reported by municipalities that received a distribution of lodging tax revenue, as identified by DOR. Some municipalities did not spend lodging tax or submit reports. JLARC staff compile but do not verify this information.


Figure 3: Municipalities reported 90 million attendees in 2023

Attendees.svg

Attendance 2019 2020 2021 2022 2023
Overall attendance 72.7 44.4 57.8 101.3 89.8
Attendees who traveled 50+ miles 35.2 17.0 22.4 30.9 40.5
Attendees from out of state or country 16.5 15.8 9.4 16.0 17.9
values in millions
Source: Data reported by municipalities that received a distribution of lodging tax revenue as identified by DOR. Some municipalities did not spend lodging tax or submit reports, while other reported incomplete data. Attendance subtotals may not equal overall attendance. JLARC staff compile, but do not verify this information.
Figure 4: Municipalities reported 21 million paid lodging nights in 2023

LodgingNights.svg

Lodging 2019 2020 2021 2022 2023
Paid lodging nights 16.1 8.0 11.9 16.0 20.9
Attendees who paid for overnight lodging 12.4 8.8 6.8 17.3 16.4
Attendees who did not pay for overnight lodging 24.8 20.0 16.3 21.5 27.1
values in millions
Source: Data reported by municipalities that received a distribution of lodging tax revenue as identified by DOR. Some municipalities did not spend lodging tax or submit reports, and others reported incomplete data. Attendance and lodging totals may not equal overall attendance. JLARC staff compile, but do not verify this information.

Municipalities reported that 56 events (3%) were affected by the COVID-19 pandemic. In comparison, municipalities reported that 14% of events in 2022 were affected.

Part 3.
Interactive data

View each municipality's annual funding, attendance, and lodging data

The interactive dashboard contains statewide totals for funding, attendance, and lodging by year. Data can be filtered by municipality to view activity-specific detail, municipality comments, and reporting compliance.

  • See the Data Field Descriptions for more detail about the data reported.

  • Download the full Excel dataset (2014 - 2023) here.

  • Click on the image to explore the data in the dashboard.

Button.png

JLARC members on publication date

Senators

Bob Hasegawa

Liz Lovelett

Mark Mullet, Chair

Ann Rivers

Jesse Salomon

Shelly Short

Lynda Wilson, Secretary

Keith Wagoner

Representatives

Emily Alvarado

Stephanie Barnard

April Berg

Jake Fey

Keith Goehner

Stephanie McClintock

Ed Orcutt, Vice Chair

Gerry Pollet, Assistant Secretary