Dive Brief:
- The Tax Relief for American Families and Workers Act of 2024 could provide tax relief to hotels across the country, according to a Cornell University study commissioned by the American Hotel & Lodging Association.
- The bipartisan act, which passed in the House of Representatives in January and is pending Senate approval, would make tax-related changes in areas that include business tax deductions and credits aimed to provide tax incentives to promote economic growth.
- Several provisions to the act, the study details, would particularly incentivize investment in hotel renovations and property upgrades. AHLA, along with nearly 80 professional organizations, urged the Senate to pass the act last month, claiming it would significantly benefit the hospitality and tourism industries.
Dive Insight:
The act’s passage would help hoteliers invest in renovations and upgrades to “stay competitive and improve the guest experience,” AHLA Interim President and CEO Kevin Carey said in a Wednesday statement.
One provision is the extension of the 100% bonus depreciation, which would provide tax relief to hotels that invest in qualified property improvements, according to the Cornell study.
For example, the study found, a hotel that made a $2.75 million investment in qualified commercial kitchen equipment could be eligible for more than $175,000 in additional tax relief under the act.
Temporarily expanding business interest deductibility — another provision to the act — would also provide tax relief, according to the study.
The legislation would create “more jobs, employee benefits and economic growth” for hotels at a time when they face “economic challenges created by persistent inflation, a nationwide workforce shortage, and an aggressive federal regulatory agenda,” said Carey, who replaced Chip Rogers at AHLA’s helm last month.
In a March 20 letter sent to Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell, AHLA and other organizations wrote that if the Senate does not pass the act, hotels could see an increase of up to 30% in their tax burden.
AHLA was among dozens of hospitality and travel groups, including the International Franchise Association, the National Restaurant Association and the U.S. Travel Association, to sign the letter.
Carey reiterated AHLA’s stance on the act Wednesday. “On behalf of America’s nearly 62,500 hotels, we call on the Senate to pass the bipartisan Tax Relief for American Families and Workers Act as soon as possible,” he said.
