July 2, 2009

Pitch a tent, pay a tax
State legislature extends rooms & meals tax to campgrounds
By Jeff Mucciarone jmucciarone@hippopress.com

The news coming out of state budget discussions last week wasn’t good for campers and campground owners in New Hampshire.

The legislature approved an $11.5 billion state budget that, among many cuts, tax increases and layoffs, will extend the rooms and meals tax to camping, essentially creating a new tax in the eyes of campers and campground owners. The budget also raises the rooms and meals tax from 8 percent to 9 percent.

“My understanding is that it’s an issue the House Ways and Means Committee has looked at a fair amount in the past,” said Senate Majority Leader Maggie Hassan, D-Exeter. “However, it wasn’t a decision that we spent a whole lot of time discussing in the budget process in the Senate. In the committee of conference process, it came in pretty late. … when one alternative after the next gets rejected, people bring in new ideas.”

Legislators reasoned that campgrounds compete with hotels and motels already subject to the tax. And campgrounds are often destinations for travelers from out of state, Hassan said.

“We had raised the rooms and meals tax,” Hassan said. “We had agreed to spend some of the money with the increase for promotion of tourism in New Hampshire. The House Ways and Means Committee brought in the idea of extending the tax to campgrounds.... All in all I think people felt it was a rational extension of the tax.”

Rep. Marjorie Smith, D-Durham, said many other states tax camping either through a sales tax or a rooms and meals tax.

“All this is doing is closing a loophole,” Smith said.

While camping officials weren’t likely to endorse the move regardless of how quickly it took hold, given that campers bring their own meals and beds, they would have liked a seat at the table. Most campground owners first learned of the potential camping tax Friday, June 19. Less than a week later, the budget was passed — with hardly any time for legislators to hear from those affected by the measure, camping officials said. Campgrounds will begin collecting taxes Wednesday, July 1.

“There were no public hearings, no input from industry owners or campers,” said Bob Bradley, owner of Blake’s Brook Campground in Epsom. “It’s a tax not on campgrounds but on campers, the camping family that’s scrimping. The way it was implemented was way out of left field. It was used as a stopgap measure to try to raise some revenues.”

“A lot of them, the anger comes because it wasn’t due process,” added Gregg Pitman, executive director of the New Hampshire Campground Owners Association. “It was slipped in at the 11th hour without any opportunity for public discourse from campgrounds.”

Camping officials complained that other potential new revenue streams, such as the refinancing tax or the entertainment tax, came up, but legislators took the time to hear from affected parties.

“The people most affected by the refinancing tax had the chance to speak up against it,” Bradley said. Both measures never came to a vote.

“I do understand why campground owners are surprised and feeling a little pressed for time on this,” Hassan said.

“When people calm down, I think overwhelmingly people understand in this state that the degree the state functions helps the quality of their own lives,” Smith said. “Sure they don’t want to pay anything, but people understand that everybody has to step up to the plate.”

Campgrounds with cabins were already charging cabin users the rooms and meals tax. New Hampshire campers will go from paying nothing in state taxes to paying the highest state tax on camping in New England. Maine has a tax of more than seven percent on campers, officials said.

“They’re flabbergasted,” Bradley said of campers. “They ask me the reasoning behind it. I can’t tell them.”

Despite the tax, Bradley said campgrounds aren’t going to start providing house cleaning services, as hotels do.

The camping tax brings with it questions, perhaps most notably: what happens to someone who paid a deposit on a campground prior to July 1 but will stay at the campground and pay in full after the new fiscal year? Bradley said he learned from the state Department of Revenue Administration that anyone who pays in full prior to July 1 will not have to pay the tax. But anyone paying only a portion prior to the new fiscal year will pay the nine-percent tax on the full bill, Bradley said. Hassan said her understanding was that anything paid prior to July 1, full payment or a portion, would not be subject to the tax.

“It’s definitely going to have a negative impact,” Pitman said. “We’re already hearing it from those that are trying to camp this summer.”

Pitman and company may hear it most loudly from seasonal campers, who pay up to $3,000 to camp for the season. Those folks will be paying the nine-percent tax on the full cost of their seasonal rental.

Campgrounds must obtain a rooms and meals tax license and they’ll need to take out a $5,000 bond to ensure payment, Pitman said.

“We’re still waiting for definitive rules to come out,” Pitman said. “They’re being very reluctant to say anything.”

Campground owners are concerned about the potential effect on the state’s tourism industry, the number two industry in the state. Campers are typically vacationing on a tight budget. A nine-percent tax might not be enough to dissuade them from camping, but it will assuredly cause them to spend less money in the local economy, Pitman said. Many seasonal and long-term campers are retired and living on a fixed income.

“So these people come to a campground. They rent a space, a piece of ground. They bring their bedroom, their own meals,” Pitman said, adding some New Hampshire communities are already taxing long-term campers but there’s no uniformity from community to community. “Then there’s a registration tax. Now they’re paying a nine-percent rooms and meals tax on top of that. It’s double and triple taxation in some cases. People just aren’t aware of that.”

“It will have a trickle-down effect on local business,” Pitman said. “Even if they keep coming, they’ll have less money to spend. Campers are people who are looking for affordable vacations. They do not have a lot of discretionary income above and beyond the rates.”

There’s nothing formal yet, but campground owners are discussing a strategy for overturning the camping tax, Bradley said.

“What I’m seeing is young families who have budgeted for a weekend away ... They’re waiting weeks to be able to afford to go away. Mom and dad are working two jobs. The kids are in daycare. Their discretionary income is eaten up before they get here,” Bradley said. “Oh by the way, you owe another 9 percent.”

“I understand that everybody would rather have somebody else pay, but in fact that can’t happen,” Smith said. “At the very time there’s a greater need for state services, the state’s revenue goes down; we need to try to counteract that.”

The Department of Revenue Administration is putting together plans for workshops to help campground owners implement the tax, Bradley said.