Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - July 18, 1997
Contact:  Governor's Communications Office, 360-902-4136

Hotel-motel tax situation resolved

OLYMPIA - Superior Court Judge Richard Strophy today granted a preliminary injunction that will allow the cities of Bellevue and Yakima to continue collecting the current hotel-motel tax that supports their convention centers. The decision also allows the cities to continue their credit against the state sales tax.


The ability to collect the taxes was in question after Gov. Locke vetoed only certain sections of a hotel-motel tax bill, SSB 5867, at the urging of cities and the hotel-motel industry. Judge Strophy based his ruling on written briefs presented by the state and the cities. The state expressed support for the preliminary injunction to the judge.


"I'm pleased we could resolve this situation through a quick legal solution," said Locke. "I had a choice to veto the entire bill or parts of it because it conflicted with legislation passed earlier in the session. I listened to those who would be affected by the bill and they urged me to make a partial veto. Now we can all move forward with a new permanent solution."


The legislation was designed to simplify the complex web of hotel-motel taxes collected by the state, cities and counties. Parts of the legislation conflicted with other legislation passed earlier in the 1997 session. The governor had considered vetoing the entire bill to maintain the status quo tax situation for the cities and counties and avoid the conflict created by the legislation.


"We worked with other cities and the lodging industry in requesting a partial veto of the legislation and unfortunately, none of us realized the impacts of the partial veto," said Gregg Mindt, executive director of the Washington State Hotel and Motel Association. "The governor was trying to help salvage the work we were doing to simplify these complex taxes. We appreciate the support the governor has given us as we tried to resolve this issue."


As soon as the governor became aware of the unintended consequences of his action, he pledged to work with the cities and the hotel-motel industry to correct the problem.


"We greatly appreciate Governor Locke's leadership on this issue," said Ron Smith, mayor of Bellevue. "He set a positive tone and was very cooperative as we worked together to get this situation cleared up."


The governor and his staff worked with the cities, counties and the hotel-motel industry to reach a temporary solution, which was agreed to today by Judge Stophy. The governor pledged to introduce legislation during the next legislative session that would address changes in the hotel and motel tax laws.


"Yakima was very concerned about the consequences of the partial veto," said Lynn Buchanan, mayor of Yakima. "We're relieved by the judge's decision and glad the governor got right on this issue and worked hard to bring it to a successful conclusion."


The ruling is effective today and effectively maintains the current hotel and motel tax laws.

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