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Proposed local occupancy fee divides municipalities and lodging industry
Summary
Senate Bill 634 would let municipalities adopt an optional occupancy fee up to $2 per night to fund tourism-related infrastructure and services. Municipal leaders and NHMA backed the local-option tool; hoteliers, small B&B operators and short-term-rental advocates warned of administrative burden, enforcement challenges and potential harm to small operators.
Senate Bill 634 would authorize municipalities to adopt a local municipal occupancy fee — up to $2 per 24-hour period or a percentage of room price not to exceed $2 — for visitor lodging to fund capital improvements, tourism-support services or revolving funds. The measure is optional and may be adopted by legislative body vote or by voter approval.
Sponsor Santis (who introduced the bill) said the fee is a local option designed to help towns that serve as regional hubs to pay for tourism-driven costs such as public safety, ambulance services and roadway maintenance without increasing property taxes. The draft exempts rentals priced at $40 or less and limits charges to stays under 184 consecutive days.
Brody Ducha of the New Hampshire Municipal Association said NHMA supports the measure as a long-standing policy position and recommended a specific dedicated fund and clear municipal spending restrictions. Mayor Del McCracken (Portsmouth) testified in favor, arguing property-value shifts have moved more tax burden to residents and that a visitor-oriented fee would better align costs with users.
Lodging industry witnesses — including Heidi Melbrand (Pleasant View Bed & Breakfast) and Joanie McIntyre (New Hampshire Association of Realtors) — opposed the bill. They raised enforcement concerns for platforms such as Airbnb and VRBO, administrative costs that may absorb small towns’ collections, and the risk that markets would be undercut if visitors avoid towns with extra fees.
Committee members debated whether increased rooms-and-meals revenue already returned to towns should be redirected or whether a local optional fee is a better targeted approach. No final committee action was taken at the hearing.
If enacted, implementation questions remain: collection and remittance (especially for multi-property chains or booking platforms), the administrative cost-to-revenue ratio in small towns, and whether voters will treat the fee as a property-tax reduction when it appears on local ballots.
