Missouri Supreme Court holds statutes creating lodging tax unconstitutional

KANSAS CITY, Mo. , July 10, 2024 /PRNewswire-PRWeb/ -- Lathrop GPM is proud to announce that Senior Counsel Curtis L. Tideman, Associate Brooke Parsons and Partner Matthew A. Jacober have secured a win for their clients Gail Griswold and Laura Salamun in a lawsuit challenging the constitutionality of the statutes creating the business districts and the lodging tax for the Lake of the Ozarks Area. On June 25, 2024, the Missouri Supreme Court agreed with Griswold and Salamun, holding that these statutes are in violation of the Missouri Constitution.

"We are thrilled that our clients were successful in this important case impacting our local tourism industry," said Tideman. "The Lake of the Ozarks area sees an extremely high volume of tourism, and the end of this lodging tax will have a significant effect on our business community. We stand by ready to help our clients navigate the new legal landscape created by this ruling."

In 1993, the Missouri legislature enacted four statutes governing the creation, operation, and dissolution of a taxing district known as the Lake Area Business District. The governing body of this district is an entity known as the advisory board, whose primary purpose is to spend the lodging tax collected in the district for the promotion of tourism in the area. The taxing district was created in Camden, Miller, and Morgan Counties – also known as the Lake of the Ozarks Area. Every lodging establishment in this area collects a lodging tax of up to 3%, which is ultimately remitted to the business district advisory boards for expenditure.

In 2020, Griswold and Salamun (on behalf of themselves and their respective lodging businesses, Shawnee Bluff Winery and Pointe View Resort), filed a lawsuit claiming that the lodging tax statutes were unconstitutional under Article VI, Section 23 of the Missouri Constitution, which prohibited "grant[ing] public money or thing of value to […] any corporation, association or individual, except as provided in this constitution." The lawsuit alleged that the statutory language of the lodging tax statutes allowed a private entity (the business district advisory boards) to control public money (the lodging tax revenue).

In the wake of this ruling, the payment and the collection of the lodging tax must cease in all regards in the Lake of the Ozarks area. The tourism industry in this region consists of large resorts, small B&Bs, and vacation rentals (such as those advertised on Airbnb and VRBO).

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Jasmine Trillos-Decarie, Lathrop GPM, 720.931.3125, Jasmine.Decarie@lathropgpm.com, https://www.lathropgpm.com/

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SOURCE Lathrop GPM