Committee clears short‑term rental excise tax option aimed at affordable housing funding

The House Finance Committee reported out House Bill 2,559, which would allow counties and cities to impose a local-option excise tax of up to 4% on short‑term rentals to fund affordable housing programs.

Serena Dolly briefed the bill and summarized three proposed amendments in the EBB: SERE 239 (Representative Jacobson) would require any local short‑term rental tax to be credited against the state sales tax portion; SERE 238 (Representative Penner) would limit a county’s short‑term rental tax to unincorporated areas and remove the requirement that counties credit city taxes; and SERE 240 (Representative Orcutt) would require voter approval before imposing the tax.

Supporters, including Representative Rammell, said the tool gives communities that suffer housing shortages another option to raise resources for affordable housing. Opponents, including Representative Jacobson and Representative Orcutt, warned of layered local taxes and the potential economic impact on homeowners and hosts who rely on this income.

After debate and rejection of several amendments by voice vote, staff read a roll call in which the committee recorded 9 ayes and 6 nays and reported the bill out with a due‑pass recommendation. Members said further conversations about crediting mechanics and local implementation would continue as the bill moves forward.

The committee’s action does not yet impose any tax; it advances the option to local governments, which would need to enact the tax locally (and in some proposals, seek voter approval) before any short‑term rental tax would be collected.