Memorandum

City of Lawrence

City Attorney's Office

TO:	David L. Corliss, City Manager
FROM:	Toni R. Wheeler, City Attorney Randall F. Larkin, Senior Assistant City Attorney
DATE:	May 5, 2015
RE:	Transient Guest Tax Overview

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Commissioner Boley has requested that the City Attorney's Office provide a brief overview and summary of the City's Transient Guest Tax. This Memo traces the history of the City's Transient Guest Tax from its inception to the present time.  A spread sheet prepared by the Finance Department summarizes the guest tax activity from 2008 to the present. 

In 1977, the Kansas legislature enacted the Kansas Transient Guest Tax Act of 1977, codified as amended at K.S.A. 12-1696 et seq. Therein, for the purpose of promoting tourism and conventions within the state, among other things, the Kansas legislature authorizes cities and counties to levy a transient guest tax not to exceed the rate of 2% upon the gross receipts paid by transient guests for sleeping accommodations, excluding incidental costs, in any hotel, motel, or tourist court. See K.S.A. 12-1697. At the same time, the Act prohibits any county from levying such tax within any city levying such tax and prohibits any city from levying such tax within any county levying such tax. See K.S.A. 12-1699.

Because the Act permits some cities to levy a transient guest tax, while prohibiting others (those located in counties levying such tax), the Act is not uniformly applicable to the cities. See 82 Kan. Att'y Gen. Op. 17 (Jan. 28, 1982). Where an act is not of statewide concern and is not uniformly applicable to the cities, the Kansas Constitution confers Home Rule Powers on cities. See Kan. Const. Art. 12, Section 5(c)(1). Under Home Rule Powers, a city may legislate on an issue -- even if the legislature has pre-empted the field and even if the city's enactment ultimately conflicts with state law -- by passing a charter ordinance.

On July 23, 1985, the City passed Charter Ordinance No. 22, wherein it opted out of K.S.A. 12-1697(a) (because it is not uniformly applicable to the cities) and levied a transient guest tax of 4% upon all gross receipts paid by transient guests for sleeping accommodations, excluding incidental costs, in any hotel, motel, or tourist court within the City. City of Lawrence, Kan., Ch. Ord. No. 22 (July 23, 1985).

On August 19, 2003, the City Commission repealed Charter Ordinance No. 22 and passed, in its place, Charter Ordinance No. 36, wherein it opted out of K.S.A. 12-1697(a) and raised the transient guest tax to 5% of gross receipts paid by transient guests for sleeping accommodations, excluding incidental costs, in any hotel, motel, or tourist court within the City. City of Lawrence, Kan., Ch. Ord. No. 36 (Aug. 19, 2003).

On August 18, 2009, the City Commission repealed Charter Ordinance No. 36 and passed, in its place, Charter Ordinance No. 39, wherein it opted out of K.S.A. 12-1697(a) and raised the transient guest tax to 6% of gross receipts paid by transient guests for sleeping accommodations, excluding incidental costs, in any hotel, motel, or tourist court in the City. City of Lawrence, Kan., Ch. Ord. No. 38 (Aug. 18, 2009).