SB 198

This bill expands the applicability of the room tax, makes a number of

substantive and technical changes to the local room tax in the areas of collections,

audits, and the exchange of information between local governments and the

Department of Revenue, establishes a common tax base between the sales tax and

the room tax, and authorizes a municipality to impose a forfeiture on a marketplace

provider that does not timely file a required room tax return to the municipality or

pay the required tax. The forfeiture may not exceed 25 percent of the room tax due

for the previous year or $5,000, whichever is less. A “marketplace provider” is

defined as a person who facilitates a retail sale by a seller by listing or advertising,

to the extent that the marketplace provider facilitates the sale or furnishing of

rooms, lodging, or other accommodations to transients.

Currently, the room tax may be imposed by a municipality or a local exposition

district on the privilege of furnishing rooms or lodging to transients by hotelkeepers,

motel operators, lodging marketplaces, and other persons who furnish such

accommodations. Under the bill, the room tax may be imposed by a municipality or

district on the sales price from selling or furnishing rooms or lodging to transients

by hotelkeepers, motel operators, and others.

2019 Wisconsin Act 10

in effect

requires lodging marketplaces to collect and remit sales taxes from third parties.

Under this bill, for transactions that occur through a marketplace provider, the

marketplace provider generally collects any room tax due from a marketplace seller

(a seller who sells products through a physical or electronic marketplace operated by

a marketplace provider), and forwards it to the municipality on a quarterly basis,

along with a form prepared by DOR. The form must include the total sales for

properties located in a municipality with a room tax, the total number of nights such

properties were rented, the room tax rate, and the total tax collected. Annually,

beginning 90 days after the bill's effective date, DOR is required to post on its website

the name of each municipality that imposes a room tax, and the rate of each room tax.

Under current law and the bill, to enforce the collection of a room tax imposed

by a municipality or local exposition district, if such entities have probable cause to

believe that the correct amount of room tax has not been assessed or that a room tax

return is incorrect, they may inspect and audit the financial records of any person

subject to the room tax. Under current law, a person who fails to comply with a

request to inspect and audit such records is subject to a forfeiture not exceeding 5

percent of the room tax imposed or 5 percent of what the municipality or district

determines the room tax should be, according to its best judgment. Under the bill,

this same forfeiture may be imposed on a marketplace provider if the municipality

or district has made three requests to inspect and audit the requested records and

the marketplace provider fails to respond or comply with the request.