Reviewing Select Cities’ Use of Transient Guest Tax Revenues [July 2025]

From 2021 – 2023, Manhattan, Overland Park, and Wichita appeared to use most of their transient guest tax revenue appropriately, but a small portion was inappropriate or unclear. Kansas statute allows cities and counties to charge guests at hotels or other short-term lodgings a tax (called a transient guest tax), which local governments can then use to fund tourism-related expenditures. Most cities with a transient guest tax charge more than the 2% rate in statute because they use the home rule provision in the Kansas Constitution to exempt themselves. The 3 cities we reviewed spent transient guest revenues differently from 2021 to 2023 but most of their spending appeared to be appropriate. All 3 cities used transient guest tax revenues to pay the local convention and visitors bureaus to promote tourism. All 3 cities appeared to use transient guest tax revenues to finance tourism and convention related bonds. Wichita appeared to use transient guest tax revenues to maintain and operate existing tourism facilities. Manhattan and Wichita used transient guest tax revenues on direct grants or sponsorships for tourism. In 2023, Manhattan transferred $100,000 of its transient guest tax revenue to the general fund, but we could not determine if it was used appropriately because of a lack of documentation. Wichita spent $16,000 of guest tax revenue from 2021 – 2023 to cover city administrative and audit fees, which is inappropriate because the expenses are not related to tourism and conventions. Finally, we also found a difference between certain definitions in Wichita's transient guest tax ordinances and state law. As a result, since 1992, KDOR may have collected and Wichita may have received transient guest tax revenues from guests at some hotels and other lodging entities that aren’t authorized in Wichita’s charter ordinance.