MARVIN MANDEL, Governor                                 1909

Senate Bill No. 1020 - Tax on Hotels and Motels

AN ACT to add new Sections 465 through 470, inclusive, to Article 81 of the
Annotated Code of Maryland (1969 Replacement Volume), title "Revenue and
Taxes," to follow immediately after Section 464 thereof, and to be under the
new subtitle "Maryland Travel Improvement Fund," imposing and levying a tax
on amounts paid for certain room and building [[and trailer space]] rentals,
providing for the payment and collection of such tax and the administration and
enforcement of provisions of this subtitle, and for civil and criminal penalties in
connection therewith; imposing a limit on the sum of the rates of all taxes
applicable to room and building rentals and providing, in certain circumstances,
for the reduction of rates of tax imposed on room and building rentals by other
laws; creating a special fund from the proceeds of such tax, providing that such
fund shall be used for tourist development purposes as appropriated by the
General Assembly, and providing for the manner and nature of such
appropriations and for the continuation of the present level of general fund
appropriations for tourist development; and relating generally to taxation of
room and building [[and trailer space]] rentals and development of tourism in
Maryland.

June 1, 1973.

Honorable William S. James

President of the Senate

State House

Annapolis, Maryland 21404

Dear Mr. President:

In accordance with Article II, Section 17 of the Maryland Constitution, I have
today vetoed Senate Bill 1020.

This bill imposes a tax on motel and hotel rentals and provides for the proceeds
to be used to promote the development of tourism in the State.

During the past session of the General Assembly, I supported the creation of a
fund for the use of State and local governments to develop and enhance tourism in
Maryland. I believe that greater expenditures in this area will be beneficial to all
the citizens of our State.

I have been advised by the Comptroller, however, that there are certain
administrative problems with the implementation of this bill. These problems arise,
in part, from certain inconsistencies between the tax created by this bill and the
Maryland Sales Tax. Moreover, with the addition of this new tax, motel and hotel
owners in certain jurisdictions would be required to administer three different taxes
in connection with the rental of a room.

I have also been advised by the Comptroller of the possibility that general fund
revenues might in the future be available to accomplish the objectives of this bill.
Obviously, it would be preferable to accomplish these objectives without the
imposition of a new tax. Consequently, I am requesting the Comptroller, the
Secretary of Budget and Fiscal Planning and the Secretary of Economic and
Community Development to investigate the feasibility of using general funds to
promote the development of tourism in the State of Maryland. Pending this study,
it would be undesirable for this bill to become law.

Accordingly, I have decided to veto Senate Bill 1020.