State’s HB456 raises lodging taxes, creates mitigation grant and narrows local spending rules

Selena Sinclair, executive director of the Utah Tourism Industry Association, told the Emery County Travel Board on May 13 that House Bill 456 — a sprawling, 1,000‑plus‑line bill — makes several changes to how lodging taxes are collected and spent.

Sinclair said the law increases the statewide transient room tax (TRT) by 0.75 percentage points, bringing the state TRT to 1.07%, and that the Utah State Tax Commission will implement that increase automatically on July 1, 2025. "This increase is going to be automatically enacted by the Utah State Tax Commission on 07/01/2025," Sinclair said.

Why it matters: Sinclair said roughly 0.5 percentage points of the statewide increase will go into a Long‑Term Capital Projects Fund for visitor‑economy projects, while 0.25 percentage points will fund a new Outdoor Recreation Mitigation Grant aimed at reimbursing counties for visitor‑related emergency and safety costs.

The bill also creates a local option: counties may adopt a 0.25 percentage‑point increase to their county TRT (raising the county maximum from 4.25% up to 4.5%) by resolution. Sinclair emphasized that county adoption must be done locally: "It can go into effect on or after July 1 … This will need to occur by resolution in each individual county in order to be enacted." She said taking the local option will make a county eligible to apply for the new mitigation grant.

Changes to allowable spending: Sinclair described tightened definitions for county TRT uses. The bill redefines "establishing and promoting" tourism and moves destination development language into the 'projects' (infrastructure) bucket. That shift will require counties to re‑examine marketing and development expenditures to ensure they fit the new statutory buckets. "We haven't had these kind of clear lines set in the sand before," she said, urging local staff and the destination marketing organization to evaluate current activities against the new definitions.

Revenue tiers and local impacts: HB456 introduces revenue tiers that change the baseline share counties must dedicate to establishing and promoting tourism. Sinclair explained that counties generating $0–$500,000 in annual TRT have no required minimum; counties generating $500,000–$1,000,000 (where Emery County is currently placed) must reserve the first 1% of county TRT for establishing and promoting. Counties generating over $1,000,000 face higher minimums. Sinclair warned that a single strong visitation year could push some counties into a higher tier.

Mitigation grant: The new Outdoor Recreation Mitigation Grant is a competitive program administered by the Division of Outdoor Recreation with an Outdoor Recreation Mitigation Board. Sinclair said it is targeted at third‑through‑sixth‑class counties that generate under $10 million annually in TRT and that have implemented the county 4.5% local option. Eligible reimbursement items include search and rescue expenses, emergency medical services, visitor‑safety costs (for example solid‑waste disposal), law enforcement activity and road repairs. Counties that apply must report incident counts, total costs and whether rescued individuals were in‑state visitors, out‑of‑state visitors or county residents.

Reporting and oversight: The bill consolidates previous TRT and TRCCA reporting into the annual county financial report to be submitted to the state auditor, who will post the data on the Utah Public Finance website and will have authority to audit counties. Sinclair said the legislature also added Senate Bill 261 to allow the legislative fiscal analyst to review county reporting and brief interim committees.

Next steps locally: Board staff said they have already discussed a county resolution to adopt the 4.5% local option with commissioners and that a template resolution may be circulated across counties. "As of right now, the feelings I've got about it is that we will move forward with that," Sinclair told the board. Adopting the local option is discretionary for counties but is the route to be eligible for mitigation grant dollars.

What remains uncertain: Sinclair noted some definitions and the state auditor's reporting form are still in development and advised county staff and the destination marketing organization to review local spending plans against the new statutory buckets before making changes.

The board heard the presentation and asked follow‑up questions about eligibility, reporting and how the revenue tiers will affect local marketing budgets. The travel board did not take a formal vote on HB456 itself; commissioners, not the travel board, will decide whether to adopt the local 4.5% option by resolution.

Authorities referenced in the presentation include House Bill 456 (transient room tax amendments) and Senate Bill 261 (reporting/fiscal analyst review).