Hotel tax exemption moves to House committee -- Gazette.Net


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Members of the House Ways and Means Committee questioned public access to a 180-room Bethesda lodging facility that would be exempt from hotel taxes under a bill proposed by Sen. Nancy J. King.

The bill would exempt corporate training facilities that provide accommodations to employees and others from paying county hotel taxes, and it sparked days of debate in the Senate before the chamber voted to send it on to the House.

Currently, defense firm Lockheed Martin’s Center for Leadership Excellence in Bethesda, where company employees and guests stay during retreats and training, is the only such corporate training facility that qualifies for exemption under the bill.

Committee members’ questions at a Thursday hearing revolved around the issue of public access to the facility and how the company charges those staying there.

King assured the committee that only employees and contractors participating in corporate training can stay at the facility. No one pays to stay there, though departments are billed internally, King said.

“We had someone, as a decoy, call the training center, just to find out if they could make a reservation, and they were immediately asked for their employee number before they would even talk to them any further,” King said.

Already the company is exempt from state sales tax on the use of the facility, per a 2010 law.

The county collects about $19 million each year from its 7 percent hotel tax, and $450,000 of that comes from Lockheed Martin.

The firm pays more than $100 million in state and local taxes each year, said King (D-Dist. 39) of Montgomery Village.

The bill is backed by Gov. Martin O’Malley (D), the Department of Business and Economic Development, the comptroller and the Montgomery County Chamber of Commerce, who all say the hotel tax discourages companies from locating their headquarters and similar training facilities in the state.

Opponents, including progressive advocacy groups, some unions and the Montgomery County Council, call the bill “corporate welfare” and say it violates home rule to take taxing power from the county.

hnunn@gazette.net