CITY OF TULSA PUSHES TAX INCREASE ON STRUGGLING HOTEL INDUSTRY
There is no doubt 2020 has thus far been a devastating year for the hospitality industry. From airlines, to cruise lines, to hotels, travel for both business and leisure have disappeared. In fact, many Courthouses in Oklahoma are holding arguments virtually, our Federal Government has provided for over $3 trillion in funds to protect businesses, employees, and those laid off during this pandemic, and the IRS, through legislation, has provided more than $500 billion in tax cuts to businesses and individuals. To further add reasons to avoid travel, civil unrest is occurring in cities all across the U.S.
Unfortunately for hoteliers in Tulsa, the City of Tulsa and the Hyatt Regency downtown feel this is an appropriate time to add a three (3%) percent tax increase, despite occupancy rates dropping an astounding fifty (50%) for most hotels. The case is before the Supreme Court currently, but the City of Tulsa and the Hyatt Regency have pushed our State Supreme Court to implement this tax, despite objections from a majority of the hotels subject to this tax. Even further, the tax has a myriad of constitutional issues, including a discriminatory effect and the fact the City of Tulsa arbitrarily, and without reason, passed this tax.
Fortunately for the hotel industry, one hotel group has protested this tax. The hoteliers won at the District Court level, where a judge found there to be a myriad of potential constitutional issues, the tax to be arbitrary and not related to legitimate governmental function, and the tax deviates from state law, which is a violation. Instead of accepting this loss with no consequences, the City of Tulsa and the Hyatt Regency Downtown figured it was appropriate to appeal this ruling during a pandemic. In fact, the City of Tulsa and the Hyatt wished to have this appeal heard at the same time the City of Tulsa was shutting down all non-essential business. This case is now pending before the Oklahoma Supreme Court.