General Overview

2022 House Bill 518 and Senate Bill 651 require Virginia Tax to convene and facilitate a work group to examine the processes currently used to collect local transient occupancy taxes and make recommendations for improving the efficiency and uniformity of those processes. 

Virginia Tax is required to prepare and submit a report of the work group’s findings and recommendations to the Chairmen of the House Committee on Finance and the Senate Committee on Finance and Appropriations no later than October 31, 2022. 

Working Group

The legislation required the work group to be comprised of:

  • One representative of the Commissioners of the Revenue
  • One representative of the Treasurers
  • One representative of the counties
  • One representative of the cities and towns
  • Two representatives of the hotel industry, and
  • Two representatives of the accommodations intermediaries

Virginia Tax asked each stakeholder group to appoint their own representative.  The appointed representatives were:

  • Commissioners of the Revenue Association – Maggie Ragon
  • Treasurers’ Association – Leigh Henderson
  • Counties – Jay Doshi for the Virginia Association of Counties 
  • Cities and towns – Adam Melita for the Virginia Municipal League
  • Hotel industry 
    • Robert Melvin for the Virginia Restaurant, Lodging &Travel Association
    • Sharon Sykes for the American Hotel & Lodging Association
  • Accommodations intermediaries
    • Alan Maher for AirBnB
    • Stephanie Gilfeather for Expedia/VRBO

August 8 Work Group Meeting

On August 8, 2022, Virginia Tax held the first virtual meeting with the transient occupancy tax work group.  Prior to the meeting, the work group participants were asked to submit written comments to facilitate the determination of the agenda for the first meeting and to share each group’s viewpoints with the other work group members.  All written comments received by Virginia Tax were circulated to the work group members in advance of the first meeting.  

The following is a high-level summary of the meeting:

  • Overview regarding the relevant 2021 and 2022 legislation, purpose of the meeting, and the study the work group is required to complete (Kristin Collins);
  • Group members were each permitted to individually present to the group their viewpoints and any comments or concerns they had regarding the work group or the report
    • Accommodations Intermediaries expressed their desire to streamline and modernize the occupancy tax remittance process through the utilization of an electronic unified portal, a centralized list of local rates, standardized return, and standardized return due date.  They also referenced a study done by the State Tax Research Institute to support their idea of the substantial administrative burden associated with local tax collection and remittance.  
    • Representatives of localities outlined the administrative difficulties and costs associated with systems and forms changes due to the varying size and resource-level of Virginia’s localities but were receptive to the possibility of standardizing forms and due dates.  They also noted the importance of audit and the need for ensuring accurate reporting.
    • Representatives of the hotel industry outlined the importance of parity between hotels and non-hotel entities and discussed the importance of occupancy tax revenue being earmarked for tourism promotion. 
  • Group members engaged in free discussion based on the following topics listed in the agenda:
    • Streamlining the process through standardization
    • Streamlining the process through the use of electronic processes
    • Audit reform
    • Data sharing
  • Group members were then given the opportunity to address any topics not yet discussed and to provide possible discussion topics for the next meeting;
  • Virginia Tax wrapped up the meeting by telling the work group members that the agenda for the next meeting would be chosen by survey, the COST study would be circulated to the group, and the members would receive a list of follow-up items for the next meeting.

September 8 Work Group Meeting

  • Greeting (Kristin Collins);
  • Discussion of topics based on poll responses:
    • Streamlining of returns and due dates – Localities’ representatives continued to be amenable to standardizing returns and possibly due dates for the returns but highlighted the issue of localities that have a ‘per-bed’ flat fee in addition to the occupancy tax.  
    • Centralized control list of rates – Virginia Tax noted that 2021 legislation requiring the development of a centralized list of rates resulted in Virginia Tax developing such a list but a significant number of localities did not respond, often due to staffing issues.   
    • Possibilities for audit simplification – AirBnB requested that localities be required to send an intermediary a written letter specifying the information sought as a prerequisite to an audit and that such a letter not be permitted more often than a set interval.  Localities’ representatives strongly opposed such a proposal citing the need for accurate reporting and the limited resources in many localities.
    • A two-tiered system of returns and due dates based on factors TBD by the group
    • Administrative hurdles faced by intermediaries and localities – Accommodations intermediaries contended that the cost of compliance with so many localities is substantial and that an e-portal is the best way to mitigate those costs.  There was near universal opposition from the other group members to the e-portal concept based on the cost, complexity, and time associated with developing such a portal.  
    • Additional topics suggested by work group members:
      • Options for and functionality of a e-portal, independent of the issue of funding
      • There was no willingness amongst the representatives of the localities or the hotel industry for further discussion of development of an e-portal.  In fact there was strong opposition to such continued discussion.
  • Meeting wrap-up and discussion of timetable for report

Please find information regarding the Work Group and supporting information at the links below: