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Tourism taxing districts could be coming soon


Twin bills with bipartisan support to jumpstart Arizona tourism appear dead in the Senate, but they may reappear this year or next as the concept has gained support nationally and here.   

SB1101 and HB2161 give cities and towns the power to create tourism marketing authorities, which can levy assessments on hotel rooms 

Although the House version passed the chamber on a 38-20 vote and the Senate version was approved in committee 7-1, neither has advanced since those respective votes. The 2020 versions of the bills also got bipartisan support, but Covid cut the session short, leaving them to die along with hundreds of other bills.  

Sen. Tyler Pace, R-Mesa, one the bills’ sponsors, likened it to a recovery bill.  

“These are not funds designed to market an individual hotel or chain, it’s a fund to market a territory or area or state,” Pace said.  

But some influential groups had problems with the legislation 

The sticking point for the Arizona Free Enterprise Club is it gives private industry taxing authority.   

Aimee Rigler, vice president of the Arizona Free Enterprise Club, said these changes go against the current tax statues, and the concerns are that taxing jurisdictions should be run exclusively through a government or local municipality to have direct oversight.  

Her organization worries about the potential precedent that could come from a marketing authority.  

“So we just think principally it’s a very bad idea for a government to basically give taxing authority to private industry,” Rigler said. 

Other concerns raised were that business owners who didn’t go along with forming a tourism marketing authority would feel at a disadvantage if they didn’t go along with the rest of the hotels.  

“You’re being forced to associate and pay these assessments for a purpose that you might not actually agree with, so that’s principally one of those issues we have with the way the legislation is drafted,” Rigler said.  

Pace said bills allow the participating hotels to be flexible with how they charge, levying an assessment as low as 50 cents if needed.  

Sen. Sean Bowie, D-Phoenix, who supports the billssaid the legislation could return if amended this session or try again next session.  

 Arizona Free Enterprise club said they wouldn’t support the bills without major changes.  

“We’re never going to support something that gives taxing authority to any entity other than the legislative body,” Rigler said. “So as soon as you, as a legislative body, abdicate that responsibility, we think that’s very bad public policy.” 

The bills have the support of the Arizona Chamber of Commerce and Industry, some cities and towns throughout Arizona, and tourismrelated industries.  

Brent DeRaad, president and CEO of Visit Tucson, who supports the bills, said that tourism marketing authorities will be coming to Arizona sometime in the future.  

He said that the proposed amendments on the table for the bills eventually became too much of a hassle to negotiate.  

Tourism has taken a hit during these turbulent times.  

Kim Sabow, Arizona Lodging and Tourism Association president and CEO, said in a press release: “Arizona’s tourism industry has been hardest hit by the economic fallout due to the COVID-19 pandemicBetween 40% – 50% of hotel jobs have been lost, representing the largest job losses of any economic sector in the state. Further, Arizona lost more than $10 billion in visitor spending during the first six months of 2020 alone.” 

According to CIVITAS Advisors, special district consultancies that work toward forming, modifying, and renewing improvement districts, there are now 184 tourism marketing authorities in 17 states, and Arizona is poised to be the 18th state to adopt this practice. 

Massachusetts and Virginia enacted enabling legislation this spring, so those states will be 17 and 18 with tourism marketing authorities or tourism improvement district, as Civitas Advisor refer them. 

Nichole Farley, director of business development and client engagement, said, “It was in the early 1990s that the first hotels decided to do something and levy an assessment on themselves for cooperative marketing, and that was in West Hollywood,”  

Four states have tourism improvement districts enabling legislation active in committee hearings, and two states are working on a draft of tourism improvement districts enabling legislation for introduction in 2022, according to data from Civitas Advisors 


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