House Finance advances six tax bills, including local short-term rental tax option to fund housing services

The House Finance Committee on Thursday, March 20 reported six tax-related measures out of committee, including a local-option short-term rental tax to fund housing-related services and facilities and measures that change business-and-occupation (B&O) tax treatment, clean up technical tax-code language, alter rules for sale refunds of seized personal property, and permit mental‑health sales-tax revenues to be used for new facility construction.

Why it matters: The bills collectively touch on several revenue streams and administrative rules that affect counties, cities and local taxing options, short-term rental owners and renters, payment processors, and providers of mental‑health and chemical‑dependency services. One measure that drew extended debate — the local short‑term rental tax — was amended to exempt common‑interest communities and was approved with a 10–5 committee vote.

House Bill 2020 (B&O treatment for payment card processing) House Bill 2020 would set a new B&O tax rate for payment‑card processing activities and allow a deduction for certain fees tied to those activities. The bill sponsor told the committee the measure aims to create fairer taxation for interchange fees and the timing of when fees are held. A Department of Revenue staff briefing described the bill’s effect and noted there were no amendments. Representative Orcutt urged support, saying processors “don’t actually ever take control of the money” and calling application of B&O tax to the full amount unfair. The committee reported HB 2020 out of committee with a due‑pass recommendation by voice vote, 15 ayes, 0 nays.

Senate Bill 5138 (convention center lodging tax use: community‑initiated equitable development) Senate Bill 5138 would add "community‑initiated…