2015 Village Goals: Ordinances, Policies, and Procedures

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Lodgers Tax

Lead person: Marcy Bissell

Target completion date:  mid-February

Tentative budget:  None.

Status/Comments:  

Definition as used in the Lodger’s Tax:

G. “taxable premises” means a hotel, apartment, apartment hotel, apartment house, lodge, lodging house, rooming house, motor hotel, guest house, guest ranch, ranch resort, motor court, auto court, auto camp, trailer court, trailer camp, trailer park tourist camp, cabin or other premises used for lodging. 

Authorization of tax:
A. A municipality may impose by ordinance an occupancy tax for revenues on lodging within the municipality.
B. The occupancy tax shall not exceed five percent of the gross taxable rent. 

Exemptions: the occupancy tax shall not apply.
A. if a vendee:
(1) has been a permanent resident of the taxable premises for a period of at least (30) thirty consecutive days; or 
(2) enters into or has entered into a written agreement for lodgings at the taxable premises for a period of at least thirty consecutive days.

Limitations on use of proceeds.

D. The following portions of the proceeds from the occupancy tax shall be used only for advertising, publicizing and promoting tourist-related attractions, facilities and events. 
(1) if the municipality or county imposes an occupancy tax of no more than two percent (2%), not less than one-fourth (1/4) of the proceeds shall be used for those purposes;
(2) if the occupancy tax imposed is more than two percent (2%) and the municipality is not located in a class A county or the county is not a class A county, not less than one-half (1/2) of the proceeds from the first three percent (3%) of the tax and not less than one-fourth of the proceeds from the tax in excess of three percent (3%) shall be used for those purposes; and
(3) if the occupancy tax imposed is more than two percent (2%) and the municipality is located in a class A county or the county is a class A county, not less that one-half (1/2 ) of the proceeds from the tax shall be used for those purposes. 

E. The proceeds from the occupancy tax in excess of the amount required to be used for advertising, publicizing and promoting tourist-related attractions, facilities and events may be used for any purposed authorized in Section 3-38-21 MNSA 1978.
Section 3-38-21 

Limitations are extensive and this is only a shortened report on how proceeds can be used.

Collecting and otherwise administering the tax, including the performance of audits required by DFA.

Establishing, operating, purchasing, constructing, otherwise acquiring, reconstructing, extending, improving, equipping, furnishing or acquiring real property or any interest in real property for the site or grounds for tourist-related facilities, attractions or transportation systems of the municipality. 

The principal of and interest on any prior redemption premiums due in connection with and any other charges pertaining to revenue bonds authorized.

Providing police and fire protection and sanitation service for tourist-related events, facilities and attractions located in the respective municipality or county; or any combination of the foregoing purposes or transactions stated in this section but for no other municipal or county purpose.


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