The city of Munich is taking steps to challenge the Bavarian state law that currently prohibits the imposition of a bed tax on tourists and business travelers. This initiative, led by Mayor Dieter Reiter of the SPD party and supported by the green-red coalition, aims to present the case before the Federal Constitutional Court to overturn the ban enacted by the state government headed by the CSU and Free Voters. The city anticipates generating annual revenues from this tax that could reach up to 100 million euros, which it sees as vital for supporting its ailing budget.

Despite the city council’s resolution to introduce the bed tax on March 1, 2023, the Bavarian parliament quickly countered by passing legislation the next day that expressly forbids such a fee, citing concerns over its potential negative impact on the hospitality industry. This rapid legislative response reflects the contentious nature of the issue, as cities like Munich, Bamberg, and Günzburg have previously attempted to collaborate on legal actions against the state’s prohibition, but have had little success in changing the law thus far.

Now, with the support of legal advisors, Munich aims to escalate this dispute to the highest legal authority in Germany, hoping for a ruling that could potentially alter the fiscal landscape of local governance in Bavaria and empower municipalities to generate essential funding through local taxes. The outcome of this case will likely set a significant precedent regarding the balance of power between local authorities and state legislation in Germany.