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HomeMy WebLinkAbout[05c] EDA - Lodging Tax Council Agenda Item f05c1 crry ori s-n irp. rWn MEETING DATE: March 7, 2016 AGENDA ITEM: EDA—Lodging Tax SUBMITTED BY: EDA BOARD/COMMISSION/COMMITTEE RECOMMENDATION: The EDA has discussed the potential implementation of a lodging tax in St. Joseph. After reviewing the process and regulations,the EDA has recommended the Council consider implementing a lodging tax. PREVIOUS COUNCIL ACTION: BACKGROUND INFORMATION: BUDGET/FISCAL IMPACT: ATTACHMENTS: Request for Council Action EDA Packet Information REQUESTED COUNCIL ACTION: Provide Direction to staff. �����„�.J��F� ' EDA Agenda Item 5 a MEETING DATE: February 17,2016 AGENDA ITEM: EDA Director Reports—Lodging Tax SUBMITTED BY: EDA Director PREVIOUS BOARD ACTION: City staff provided background information to the EDA in November regarding establishing a Lodging Tax. The EDA motion to continue researching and bringing information back to the Board far consideration. BACKGROUND INFORMATION: Following this cover sheet is a draft Ordinance(610 Lodging Tax)for consideration along with samples of other cities Ordinance. It can be seen that the Ordinance are very similar and contain the same language. Also provided is some information on establishing lodging tax from House Research. I have reached out a couple of times to the St. Cloud Visitors Bureau and they have not responded. I will follow up again this week to see how we can interact with them or partner in some fashion. Waite Park and Sartell are both currently members of the St. Cloud Visitor Bureau and are looking at creating their own to assure that the funds are expended promoting their communities. As stated at the last meeting the EDA could recommend, as part of the Ordinance, establishing a local CVB and include membership from the business community, College/LTniversity,residents are large and monastery. This Board would work under the auspices of the EDA assisting with the marketing and , promotion. BUDGET/FISCAL IMPACT: ATTACHMENTS: Request for EDA Action Draft Ordinance 610, Lodging Tax House Research—Lodging Tax Sample Ordinances—Communities with Lodging Tax REQUESTED BOARD ACTION: Provide Direction CHAPTER VI—GENERAL REGULATIONS ORDINANCE 610 Lodging Tax Section 610.01: PURPOSE. In order to increase commerce and to provide for a vibrant city atmosphere that will attract tourism and convention business to the city, it is essential that the city be marketed and promoted by a local convention and tourist bureau. Section 610.02: DEFINITIONS. The word or words defined in this Section shall have the meaning described in the subdivision which follow: Subd. 1: Hotel. The furnishing for consideration of lodging at hotels,motels,rooming houses/facilities,tourist courts or resorts, other than the renting or leasing of lodging for a continual period of 30 days or more. Subd. 2: Operator. The person who is the proprietor of the hotel,whether in the capacity of owner, lessee, sub lessee, licensee, or any other capacity, is an operator Section 610.03: IMPOSITION OF TAX. The following tax, as authorized my MN Statute 469.190 will apply: Subd. 1: A tax of three percent is hereby imposed on the gross receipts generated within the city from the furnishing for consideration of lodging at hotels,motels,rooming houses/facilities,tourist courts or resorts, other than the renting or leasing of lodging for a continual period of 30 days or more Subd. 2: Those persons qualifying under paragraph one of this section will pay a tax on the operator of the hotel or the establishment at the time the charge is paid. The t� constitutes a debt owed to the City by the operator and is extinguished only by payment to the City. Section 610.04: DISTRIBUTION OF TAX. The three percent(3%)tax collected will be distributed according the MN Statute 469.190. Ninety-five percent of the proceeds must be used to fund a local convention and tourist bureau for the purpose of marketing and promoting the City as a convention and tourist center for that purpose. Section 610.05: EXCEPTIONS AND EXEMPTIONS. Subd. 1: Privilege of Occupancy: a) Exceptions. No tax will be imposed on room rentals paid by any officer or employee of a foreign government who is exempt by reason of express provisions of federal law or international treaty. 609-1 CHAPTER VI—GENERAL REGULATIONS b) Exemptions. No exemption from the tax imposed under this Code will be granted except upon a claim thereof made at the time the rent is collected by the operator, and such claim will be made in writing and under penalty of perjury. All such claims will be forwarded to the City when the reports and collections are submitted as required under Section 610.05 of this Code. Such exemptions will be granted as follows: Upon any person to whom, or occupancy to which, it is beyond the power of the City to so tax Section 610.06: COLLECTIONS. Subd. 1: Onerators Duties: Each operator will collect the tax imposed by this Code at the time the rent is paid. The amount of tax will be separately stated from the rent charged. Those persons paying the tax will receive a receipt of payment from the operator: Subd. 2: Reports. Each operator collecting such tax will make a report upon forms distributed to the operator by the Finance Director. Such reports will contain, at a minimum: A. The amount of room rentals collected. B. The amount of ta�c required to be collected and due for the period. C. The signature of the operator or that of the agent if the operator has not made the report. D. The period the return covers. E. The amount of room rentals uncollectible. F. Such additional information as the City Council, in its discretion, from time to time requires. Subd. 3: Payment to the City. Payment to the City. Payment of the tax will be submitted by the operator to the City along with the required reports. Payrnent will cover the tax due for the preceding calendar month, or any alternative four-week accounting period, whichever the case will be, and such payment will be made no later than 25 days after the en�i of such calendar or alternative accounting month. Subd. 4: Examination of Return. After a return is filed, the Finance Director may make any examination of the records and accounts of the person making the return which he deems necessary for determining its correctness. The tax computed on the basis of such examination will be the tax to be paid. If the tax due is found to be greater than that paid, such excess will be paid within ten days after receipt of notice. Such notice will be given either personally or sent by registered mail to the address listed on the return. If the tax paid is greater than the t� found to be due, the excess paid will be refunded to the operator at the address listed on the return. Section 610.07: Penalties. Subd. 1. Original DeficiencX. Any operator failing to make payment within the 25-day period specified in sub-section 610.06, Subdivision 3, of this Code will be required to pay a 609-2 CHAPTER VI—GENERAL REGULATIONS penalty of five percent (5%) of the tax amount remaining unpaid. The amount of said tax not timely paid, together with said penalty, will bear interest at the rate of seven percent (7%) per annum from the time such tax should have been paid until paid. Any interest and penalty will be added to the t� and be collected as a part thereof. Subd. 2. Continuing Deficiency. If payment of the tax and the five percent(5%)penalty imposed under subdivision 1 of this section is not paid within 30 days of the date the tax is due as specified in sub-section 610.06, Subdivision 3, of this Code, an additional ten percent (10%) penalty will be imposed upon the amount of tax due plus the original deficiency penalty of five percent (5%). If the delinquency continues beyond 30 days after the tax is due as specified in sub-section 610.06, Subdivision 3, of this Code, the City Attorney may commence such action necessary to collect the tax and penalties due. Subd. 3. Abatement of Penalties. The Administrator will have the power to abate penalties when, in his opinion, the enforcement would be unjust and inequitable. All requests for abatement of penalties will be in writing and will set forth the reasons for the failure to file the return and pay the tax timely. The Administrator will report all penalty abatements to the City Council at the next regular City Council meeting. Section 610.07: TAX DETERMINED BY THE CITI' COUNCIL. Subd. 1: If the operator refuses to collect the t� imposed or fails to make the required reports, the Finance Director will obtain facts and information and make an estimate of the amount of tax due and report to the City Council for approval. After approval by the City Council, the Finance Director will give the operator a statement of the tax due to his estimate and give notice personally or through registered mail to such operator of the amount due. Depending upon the time periods as specified in Section 610.07 of this Code, the amount of tax estimated will include the applicable penalties and interest. Payments will be made within ten days after receipt of notice. For the purpose of carrying out the provisions of this section, the Finance Director will have the right of access to the books and recc�rds of the operator. Subd. 2. The operator will have ten days after receipt of notice to make a written application for a hearing on the assessed tax to the Finance Director. If no request is made during this ten day period, the amount specified in the statement of the Finance Director, including penalties and interest,becomes final and payable within ten days. Subd. 3. If a hearing is properly requested, the running of the time periods described in Section 610.06 of this Code are automatically stayed. Notice of the hearing will be given to the operator at least ten days in advance. All hearings are to be held before the City Council. The Council may then determine the amount due, when it will be paid, and whether or not the penalty time period under Section 610.07 of this Code will resume running until payment. Once the amount due becomes fixed under either Subdivision 1, 2, or 3, of this section, any further steps necessary to ensure collection may be taken by the City Attorney. 609-3 CHAPTER VI—GENERAL REGULATIONS Section 610.08: Administration. The City Administrator shall have responsibility for enforcement and administration of this Ordinance. Section 610.09: Deposit in Special Purpose Fund. All revenues collected pursuant to Section 610 will be deposited in a special purpose fund, hereby established,to be known as the "Hotel-Motel Tax Fund." Section 610.10: Distribution. Distribution of all revenues collected pursuant to this Ordinance will be in accordance with the percentages established in Section 610.04 shall be under budget approved annually by the St. Joseph Economic Development Authority and will be used for the purpose of the advancement of the City of St. Joseph as a tourist and convention center. The City may retain a sum not to exceed the actual amount of its costs incurred in the collection and administration of this tax. 609-4 INFORMATION BRIEF Research Department Minnesota House of Representatives 600 State Office Building St. Paul,MN 55155 Pat Dalton, Legislative Analyst 651-296-7434 August 2012 Local Lodging Taxes in Minnesota Lodging taxes are imposed on short-term lodging by a number of local governments in Minnesota,mainly by cities and towns. All cities and towns, and counties on behalf of unorganized townships,may impose up to a 3 percent tax by statute, if 95 percent of the revenue raised is used for tourism promotion. Lodging taxes imposed at a higher rate or for other purposes are generally imposed under special law, although a few enacted before 1972 were imposed by city charter. This information brief provides a history of local lodging taxes in Minnesota. In addition to the history, a table at the end provides more detail on the local lodging taxes imposed by special law or city charter by individual local governments. Lodging Taxes Prior to 1972 Prior to 1972,the state did not prohibit local governments from imposing local sales taxes on either general sales or sales of specific items, including lodging. Home rule charter cities could enact local lodging taxes if allowed under the charter. In 1969 a special law was passed that allowed Minneapolis to impose a 3 percent tax on admissions,transient lodging, and sales at restaurants and bars with live entertainment. In 1970, Bloomington,Duluth, and St. Paul all passed 3 percent transient lodging taxes by ordinance and charter amendments. The Bloomington tax also applied to admissions to spectator events. In 1971,the city of Rochester also adopted a 3 percent local lodging tax by charter amendment and ordinance. Copies of this publication may be obtained by calling 651-296-6753. This document can be made available in alternative formats for people with disabilities by calling 651-296-6753 or the Minnesota State Relay Service at 711 or 1-800-627-3529 (TTY). Many House Research Department publications are also available on the Internet at: www.house.mn/hrd/hrd.htm. House Research Department August 2012 Local Lodging Taxes in Minnesota Page 2 Prohibition Against Most Local Taxes in 1971 In 1971, as part of the"Minnesota Miracle"and as a tradeoff for more state aid to local governments,the legislature enacted a general prohibition against new or increased local sales and income taxes. The law states that"No county, city,town, or other taxing authority shall increase a present tax or impose a new ta�c on sales or income."' This prohibition applies to lodging taxes as well as general sales taxes. The preexisting t�es,however,were allowed to continue. Between 1972 and 1983 only two new lodging taxes were authorized under special law: a 3 percent tax in the city of St. Cloud(1979) and a Minneapolis tax(1979)in the downtown area to fund the Metrodome.2 General Statutory Authority for Lodging Taxes In 1983,notwithstanding the general prohibition against local sales taxes,the state authorized cities to impose a local sales tax of up to 3 percent on transient lodging of 30 days or less.3 In 1985 the authority was expanded to towns and counties on behalf of unorganized territories in the county. The authority was also granted to any combination of cities,towns, and counties acting under a joint powers agreement. In addition,the 19851aw allowed cities to extend the lodging tax on camping site receipts in a municipal campground. Currently, about 100 jurisdictions impose a local lodging tax under this authority. A city can impose the tax by ordinance, and a town can impose the tax by a vote of the electors at a general or special town meeting. To impose the tax in unorganized territories,the county board must pass a resolution to that effect,put a public notice in the newspaper, and hold a public hearing prior to passing a fmal resolution imposing the tax. If 5 percent of the voters in the unorganized territories petition for a vote within 30 days of the final resolution,the tax may not be imposed until approved by the voters in the unorganized territories at a general or special election. Ninety-five percent of the revenues from a tax imposed under the general authority must be used for tourism and convention center promotion. In addition,the statute prohibits a local government that has a lodging tax imposed by a special law or charter provision to use the statutory authority to increase the combined lodging tax rate to more than 3 percent. In 1987, as part of the recodification of the local lodging tax statute,a provision was added allowing a jurisdiction to negotiate with the Department of Revenue to collect the lodging tax. The department is allowed to retain from the collected revenues an amount to cover the costs of collection. Most local governments continue to collect the tax locally;the state only collects �Minn. Stat. §477AA16. 2 In addition,the city of Duluth was granted authority to impose a general 1 percent sales tax under 1973 special law on all taxable sales in the city,including lodging. 3 Laws 1983,ch. 342,art. 13,originally codified in Minn. Stat. §477A.018 and recodified in Minn.Stat. § 469.190 under Laws 1987,ch.291,§ 191. House Research Deparhnent August 2012 Local Lodging Taxes in Minnesota Page 3 lodging tax for the cities of Minneapolis, St. Paul,Rochester, and Biwabik. A 2011 law requires that any local lodging tax collected by the state to use the statutory definition of"lodging"in chapter 297A as the tax base. The current definition of lodging contained in Minnesota Statutes, section 469.190, differs slightly from the definition for sales tax purposes contained in Minnesota Statutes, section 297A.61, subdivision 3,paragraph(g), clause(2), as do the lodging definitions for lodging taxes imposed under some of the special laws 4 During the 1989 special session,the law was amended to increase the maacimum local lodging tax rate imposed under the statute from 3 percent to 6 percent and to allow the local government to use the amount raised by the tax rate above 3 percent for general governmental purposes. This increase in authority was repealed in 1990, and the allowed rate of 3 percent and allowed use for tourism and convention promotion have not changed since 1990. Use of Local Sales Tax Revenue for First Class Cities In Laws 2012, chapter 299, article 5, section 6, all cities of the first class were granted additional flexibility in the use of revenue derived from any local sales tax, including lodging taxes.s A city may divert any revenue not needed to fund the projects listed in the authorizing law for the local tax to fund construction, expansion, or renovation projects for a sports facility or convention center,if the project cost is at least$40 million. A summary of the lodging taxes imposed under special law, or by local charter prior to 1972, are listed in the following table. 4 The main difference lies with the inclusion of fees charged by online travel companies in the state's definition of lodging for general sales tax purposes that was enacted in 2011. The complementary change was not made to the definition of lodging in the local lodging tax statute. Some special law lodging taxes treat other related services such as phone charges and room service differently from the definition in the general sales tax law. s Minn.Stat. §297A.9905. CITY OF SAUK RAPIDS SECTION 4.18B MOTEL TAX Subd. 1. Imposition of Tax. On or after the 1 st day of January, 1988,the following tax,as authorized by the Laws of Minnesota,Chapter 477A.018 shall apply. A. For the privilege of occupancy of any motel room,a person shall pay a tax in the amount of three percent(3%)of the room charge made by the operator of the motel. Said tax constitutes a debt owed to the City by the operator and is extinguished only by payment to the motel operator on behalf of the City. Subd. 2. Collections. A. Operator's Duties. Each motel operator shall collect the tax imposed by this Code at the time the room charge is paid. The amount of tax shall be separately stated from the rent charged. Those persons paying the tax shall receive a receipt of payment from the operator. B. Reports. Each motel operator collecting such tax shall make a report upon forms distributed to the operator by the City Administrator-Clerk. Such reports shall contain,at a minimum: A. The amount of room rentals collected. B. The amount of tax required to be collected and due for the period. C. The signature of the operator or that of the agent if the operator has not made the report. D. The period the return covers. E. The amount of room rentals collectible. F. Such additional information as the City Council,in its discretion, from time to time requires. C. Payment to the City. Payment of the tax shall be submitted by the operator to the City along with the required reports. Payment shall cover the tax due for the preceding calendar month,or any alternative four-week accounting period,whichever the case shall be,and such payrnent shall be made no later than 25 days after the end of such calendar or alternative accounting month. D. Examination of Return. After a return is filed,the City Administrator-Clerk may make any examination of the records for determining its correctness. The tax computed on the basis of such examination shall be the tax to be paid. If the tax due is found to be greater than that paid, such excess shall be paid within ten(10)days after the receipt of notice. Such notice shall be given either personally or sent by registered mail to the address listed on the return. If the t�paid is greater than the tax found to be due, the excess paid shall be refunded to the operator at the address listed on the return. For the purpose of carrying out the provisions of this section,the City Administrator-Clerk shall have the right of access to the books and records of the operator. E. The operator shall have ten(10)days after receipt of notice to make a written request for a hearing before the City Council on the assessed tax. If no request is made to the City Administrator-Clerk during this ten(10)day period,the amount specified in the statement of the City Administrator-Clerk, including penalties and interest,becomes final and payable within ten(10)days. F. If a hearing is properly requested,the running of the time periods described in this ordinance are automatically stayed. Notice of the hearing shall be given to the operator at least ten(10)days in advance. The Council may then determine the amount due,when it shall be paid, and whether or not the penalty time period under this Section shall resume running until payment. Once the amount due becomes fixed by the City Council,collection may be taken by the City Attorney. Subd. 3. Administration. The City Administrator-Clerk shall be charged with the responsibility for enforcement and administration of this section. Subd. 4. Violations. Violation of any provision of this section shall be a misdemeanor. Subd. 5. Deposit in Special Purpose Fund. All revenues collected pursuant to this section shall be deposited in a special purpose fund,hereby established to be known as the"Motel Tax Fund." Subd. 6. Distribution. Distribution of all revenues collected pursuant to this section shall be under budget approval annually by the City Council and shall be used for the purpose of the advancement of the City of Sauk Rapids as a tourist and convention center in cooperation with the City of St. Cloud. The City of Sauk Rapids may retain a sum not to exceed five(5%)percent for its costs incurred in the collection and administration of this tax.Any amounts collected by the City but not expended annually shall be held in the "Motel Tax Fund"established in this section and may be budgeted for future promotion,or used for development of new facilities which will benefit the tourist industry. City of Little Falls :: Tourism http://www.cityoflittlefalls.com/Community/Tourism/index.php Home City Information Resident Business Community ���� ���� M � ��', �,� � � � ��,�.��,,� ��� � }� �����d�.,'� �� �� Emergencies•Maps•Calendar•Contact Us Home >Communitv >Tourism > Tourism Little Falls Convention and Visitors Bureau The Little Falls Convention and Visitors Bureau(CVB)is an economic and community development organization whose purpose is to expand the city's economy by attracting conventions, meeting,groups and tourist visitors.The CVB is responsible for marketing Little Falls and the surrounding area as a desirable destination for meetings,conventions and tourism activities. Millions of dollars from visitor spending and increased tax revenues can be generated to increase commerce, sustain jobs, and enhance a city's image. The CVB is an independent not-for-profit organization.The CVB is funded primarily through a tax levied on Little Falls lodging and eating establishmenYs.The CVB works to provide information services through brochures,guides, maps, internet, 1-800#,advertising,electronic marketing, and group&meeting planning. Established in 1990 and reorganized in 1999,to increase tourism and convention business into the Little Falls and Morrison County area. Nine member volunteer board of directors:2 lodging representatives,2 restaurant representatives,2 attractions representatives, 2 citizens at large and 1 member representing Camp Ripley. The CVB has 2 full time employees who serve as the city's liaison between visitors and the businesses that will host them. The CVB acts as an information center,group and meeting planner,and tourism promotion organization for our area, as well as a catalyst for economic development growth. Contact Information: Little Falls Convention and Visitors Bureau 606 First Street SE Little Falis, MN 56345 Phone:(320)616-4959 or(800)325-5916 Fax: (320)616-4961 E-mail: info littlefallsmn.com Website:www.littlefallsmn.com W v`��14 � _ 3',hb xN � r.�.<,, �„� �r t 5 , _ > .f., , , xv.4..�..:..........i.m.s � 1 of 2 2/13/2016 11:37 AM CITY OF LITTLE FALLS 6.36: LODGING TAX: A.Amount of Tax: A tax of three percent(3%) is hereby imposed on the gross receipts from the furnishing for consideration of lodging at a hotel,motel,rooming house,tourist court or resort,within the city, other than the renting or leasing of it for a continuous period of thirty(30)days or more. B.Persons Liable For Lodging Tax: All persons furnishing for consideration lodging at a hotel,motel, rooming house,tourist court or resort within the city,other than the renting or leasing of it for thirty(30) days,are liable to the city for payxnent of the lodging tax established hereby. C.Payment of Tax: All persons liable for payment of the lodging tax shall remit amounts due to the city at least monthly.Remittance of amounts due shall be accompanied by such information as the city administrator may require showing calculations of the amount due. All persons liable for payment of the lodging tax shall maintain books and records of their activities which shall be available for inspection by the city at reasonable times and upon reasonable notice. D.Disposition of Proceeds:Disposition of proceeds of the lodging tax shall be made pursuant to Minnesota statutes section 469.190, subdivision 3, as amended.The city council may, at its discretion, seek such counsel or advice as it deems appropriate in disposition of the proceeds. (Ord. 107, 3rd Series,eff. 7-1-1991) Tourism and Visitors Bureau�City of Saint Peter,Minnesota http://saintpetermn.gov/tourism-and-visitors-bureau �,.---�— CONTACT US HO�vE CALENDAR DEPARTbENTS MAPS ND�E COM�AUNfTY NOTIFICATION SYSTEM �,�y '... � Recreation Reuistration Pav Utilitv Bills Pav Other Fees Services A-Z WeekN HM Sheet �� ���� Enter Search Keyword � � I'/�'L� �� J ERF, ISTCNtY& OCRE53 MEET ' ourism and Visitors Bureau he Tourism and vsitors Bureau was created when the City's lodging tax was implemented. Ninety-five percent(95%)of the proceeds obtained from the collection of lodging taues must be used to fund a local convention or tourism bureau for the purpose of marketing and promoting the City as a tourist or convention center. he Tourism and Visitors Bureau meets on the fourth Friday of each month at 8:00 a.m. There are nine members on this board. Members serve three year terms. egular meeting dates are subject to change due to holidays,special circumstances,and/or elections. If unsure about a meeting date or time,or to receive i�formation on the location of the monthly meetings,please contact the Chamber of Commerce at 507-9343400 or by e-mail at spchambCa)hickoMech net mailto:s chamb hicko ech.net . or information on the members of this board,please contact the City Administrator's Office. ity Council advisory board and commission members are recommended by the Mayor and appointed by the City Council. Vacancies occur most frequently at the end f the year,however vacancies do occur throughout the year as well. If you are interested in being considered for appointment to this or any other advisory board or ommission,please contact the City Administrator's Office at 934-0663 or barbara�saintqetermn gov rma�iro bartarai@sa�ncoe�ermn oo�i for an application card. Members must live within the corporate limits of the City of Saint Peter. 1 of 1 2/13/2016 11:40 AM City of Stillwater Sec. 56-5. - Local lodging tax—Established. (a) Purpose. In order to increase commerce and to provide for a vibrant city atmosphere that will attract tourism and convention business to the city, it is essential that the city be marketed and promoted by a local convention and tourist bureau. (b) Lodging tax establishxnent. In furtherance of that purpose,and pursuant to Minnesota Statutes § 469.190,a tax of three percent is hereby imposed on the gross receipts generated within the city from the furnishing for consideration of lodging at hotels,motels,rooming houses,tourist courts or resorts,other than the renting or leasing of lodging for a continual period of 30 days or more. (c) Collection. Any person,corporation,partnership or association(operator)that provides lodging to others must collect the tax at the time lodging charges are paid.The amount of tax must be separately stated from the lodging charges and held in trust for the city until remitted to the city. (d) Payxnents and returns.The taxes imposed by this section must be paid by the operator to the city quarterly not later than 30 days after the end of the calendar quarter in which the taxes were collected. At the time of payxnent,the operator must submit a return upon forms provided by the city.The return must contain the following minimum information: (1) The total amount of rent collected for lodging during the period covered by the return. (2) The amount of tax required to be collected and due for the period. (3) The signature of the person filing the return or that of his agent duly authorized in writing. (4) The period covered by the return. (5) The amount of uncollectible rental charges subject to the lodging tax.The operator may offset against the taxes payable with respect to any reporting period,the amount of taxes imposed by this section previously paid as a result of any transaction,the consideration for which became uncollectible, and exclude from charges subject to the tax,any person whose occupancy is beyond the power of the city to tax by reason of the federal law or international treaty. (e) Examination of return, adjustments,notices and demands.The city must,after a return is filed, examine the return and make any examination of the records and accounts of the person making the return deemed necessary for determining its conectness. The tax computed on the basis of the examination is the tax to be paid. If the tax due is found to be greater than that paid,the excess must be paid to the city within ten days after receipt of a notice thereof given either personally or sent by registered mail to the address shown on the return. If the tax paid is greater than the tax found to be due,the excess must be refunded by the city to the person who paid the tax within ten days after determination of the refund. (fl Failure to file a return. Subd. 1. If any person required by this section to file a return fails to do so within the time prescribed,or makes willfully or otherwise an incorrect, false or fraudulent return,upon written notice and demand,the person must file a return or a corrected return within ten days of receipt of written notice and must at the same time pay any tax due. If a person fails to file a return or corrected return,the city must make a return or corrected return for the person based upon the knowledge and information and assess a tax on the basis thereof,which tax(less any payments theretofore made on account of the tax for the taxable period covered by the return)must be paid within ten days of the receipt of written notice and demand for payrnent. Any return or assessment made by the city is prima facie correct and valid,and the burden of proving to the contrary rests with any person in any action or proceeding in respect thereto. Subd. 2. Upon a showing of good cause,the city may grant an operator one 30-day extension of time within which to file a return and make payment of taxes as required by this section,provided that interest during the period of extension must be added to the taxes due at the rate of eight percent per annum. (g) Penalties. Subd. 1. If any tax imposed by this section is not paid within the time required for payment,or an extension,there must be added a penalty equal to ten percent of the amount remaining unpaid. Subd. 2. If any person willfully fails to file any return or makes any payxnent required by this section,or willfully files a false or fraudulent return or willfully attempts in any manner to evade or defeat the tax or payment thereof,there must also be imposed as a penalty an amount equal to 50 percent of any tax(less any amounts paid on the basis of the false or fraudulent return)found due for the period to which the return related.The penalty imposed by this section must be collected as part of the tax and are in addition to any other penalties provided by this section. Subd. 3. All payments received will be credited first to penalties,next to interest and then to the tax due. Subd.4. The amount of tax not timely paid,together with any penalty provided by this section,will bear interest at the rate of eight percent per annum from the time the tax should have been paid until payxnent is made. Any interest and penalty will be added to the tax. Subd. 5. In the event that any tax remains unpaid for 30 days after it is due,in addition to the right to institute legal action to collect the amounts due,the city may certify the tax, together with any penalty, interest and costs,to the county auditor for collection with the real estate taxes. (h) Examine records. Persons acting on behalf of the city and authorized in writing by the city may examine the books,papers and records of any operator in order to verify the accuracy of any return made or, if no return was made,to ascertain the tax as provided in this section. Every such operator must give to the city the means, facilities and opportunity for examinations and investigations as are hereby authorized. (i) Disposition of proceeds.Ninety-five percent of the proceeds must be used to fund a local convention and tourist bureau for the purpose of marketing and promoting the city as a convention and tourist center and for that purpose,the city is authorized to enter into an agreement with the Greater Stillwater Area Convention and Visitor's Bureau. (j) Violations.Any person who willfully fails to make a return by this section or who fails to pay the tax after written demand for payment,or who fails to remit the taxes collected or any penalty or interest imposed by this section after written demand for payment, or who refuses to permit the city's authorized agents to examine the books,records and papers under their control,or who willfully makes any incomplete, false or fraudulent return is guilty of a misdemeanor. (k) Appeals. Subd. 1. Any operator aggrieved by any notice,order or determination made by the city under this section, except for the criminal penalties,may file a petition for review of such notice,order or determination. The petition shall contain the name of petitioner,petitioner's address and the location of the lodging subject to the notice,order or determination. The appeal must be first heard by the city administrator. Appeal may be made to the city council by the aggrieved party filing a written notice of appeal with the city clerk within ten days after the administrator's determination is made to the appellant. (1) Effective date.This section will be in full force and effect from and after its date of publication and will establish the tax set forth in this section upon gross lodging receipts generated beginning on January 1,2014 and thereafter and,unless revised by action of the city council,until January 31, 2017,when the tax will sunset by operation of law. (m) Annual report.The Convention and Visitors Bureau(CVB)Board must provide the city council an annual final report prior to December 1 of each year.At a minimum,the report must account for income and expenses of the CVB for the year,and propose a budget for the following year. (Ord.No. 990, §§ 1-12, 10-30-07; Ord.No. 1025, §§ l, 2, 12-21-10; Ord.No. 1063, § 1, 1-21-14) Editor's note—Ord.No. 990, §§ 1-12, adopted Oct. 30, 2007,was not specifically amendatory of the Code and has been included as 56-5 at the discretion of the editor. City of St.Cloud Section 441A-Hotel,Motel Tax Section 441A:00. Defmitions. Subd. 1. Hotel- The furnishing, for a consideration, of lodging by a hotel, tourist court, or motel, and the granting of any similar license to use real property other than the renting or leasing thereof for a continuous period of 30 days or more. Subd. 2. Operator-The person who is the proprietor of the hotel, whether in the capacity of owner, lessee, sub lessee, licensee, or any other capacity, is an operator. Section 441A:05. Imposition of Tax. The following tax, as authorized The Laws of Minnesota 1979, Chapter 197,will apply: (1) For the privilege of occupancy of any hotel, each person will pay a tax in the amount of five percent(5%)of the charge made by the operator. (2) Those persons qualifying under paragraph one of this section will pay the tax on the operator of the hotel or the establishment at the time the charge is paid. The tax constitutes a debt owed to the City by the operator and is extinguished only by payment to the City. Section 441A:07. Distribution of Tax. The five percent (5%)tax collected will be distributed as follows: 52.5% Convention and Visitor's Bureau 40.0% Civic Center 1.0% Finance Department 1.5% Community Festival 3.0% Municipal Athletic Complex 2.0% Municipal Gardens Section 441A:10. Exceptions and Exemptions. Subd. 1. Privilege of Occupancy. (a) Exceptions. No tax will be imposed on room rentals paid by any officer or employee of a foreign government who is exempt by reason of express provisions of federal law or international treaty. (b) Exemptions. No exemption from the tax imposed under this Code will be granted except upon a claim thereof made at the tixne the rent is collected by the operator, and such claim will be made in writing and under penalty of perjury.All such claims will be forwarded to the City when the reports and collections are submitted as required under Section 441A:15 of this Code. Such exemptions will be granted as follows: Upon any person to whom, or occupancy to which, it is beyond the power of the City to so tax. Section 441A:15. Collections. Subd. 1. Operator's Duties. Each operator will collect the tax imposed by this Code at the time the rent is paid. 'The amount of tax will be separately stated from the rent charged. Those persons paying the tax will receive a receipt of payrnent from the operator. Subd. 2. Reports. Each operator collecting such tax will make a report upon forms distributed to the operator by the Finance Director. Such reports will contain, at a miniinum: (a) The amount of room rentals collected. (b) The amount of tax required to be collected and due for the period. (c) The signature of the operator or that of the agent if the operator has not made the report. (d) The period the return covers. (e) The amount of room rentals uncollectible. (fl Such additional information as the City Council, in its discretion, from time to time requires. Subd. 3. Payment to the City. Payment of the tax will be submitted by the operator to the City along with the required reports. Payment will cover the tax due for the preceding calendar month, or any alternative four-week accounting period, whichever the case will be, and such payment will be made no later than 25 days after the end of such calendar or alternative accounting month. Subd. 4. Uncollectible Charges. The operator may offset against the tax due with respect to any reporting period the amount of the taxes imposed by Section 441 A:OS of this Code previously paid as a result of any transaction which becomes uncollectible during such reporting period, but only in proportion to the portion of such amount which becomes a collectible. Subd. 5. Examination of Return. After a return is filed, the Finance Director may make any examination of the records and accounts of the person making the return which he deems necessary for determining its correctness. The tax computed on the basis of such examination will be the tax to be paid. If the tax due is found to be greater than that paid, such excess will be paid within ten days after receipt of notice. Such notice will be given either personally or sent by registered mail to the address listed on the return. If the tax paid is greater than the tax found to be due, the excess paid will be refunded to the operator at the address listed on the return. Section 441 A:20. Refunds. Subd. 1. Any operator may file for a refund for taxes paid in excess of the amount legally due for that period, provided that no such claim will be entertained unless filed within one year after such tax was paid. Subd. 2.Upon application, the Finance Director will determine the correctness of the claim and return any excess paid. If no excess is found, the City will so inform the operator. The operator may make written application for a City Council hearing within five days after receipt of notice that the claim has been denied. The operator will be informed at least five days in advance of the scheduled Council hearing. Section 441A:25. Penalties. Subd. 1. Original Deficiency. Any operator failing to make payment within the 25-day period specified in sub-section 441A:15, Subdivision 3, of this Code will be required to pay a penalty of five percent (5%) of the tax amount remaining unpaid. 'The amount of said tax not timely paid, together with said penalty, will bear interest at the rate of seven percent (7%) per annum from the time such tax should have been paid until paid. Any interest and penalty will be added to the tax and be collected as a part thereof. Subd. 2. Continuing Deficiency. If payment of the tax and the five percent(5%)penalty imposed under subdivision 1 of this section is not paid within 30 days of the date the tax is due as specified in sub-section 441A:15, Subdivision 3, of this Code, an additional ten percent (10%) penalty will be imposed upon the amount of tax due plus the original deficiency penalty of five percent (5%). If the delinquency continues beyond 30 days after the tax is due as specified in sub-section 441A:15, Subdivision 3, of this Code, the City Attorney may commence such action necessary to collect the tax and penalties due. Subd. 3. Abatement of Penalties. The Mayor will have the power to abate penalties when, in his opinion, the enforcement would be unjust and inequitable. All requests for abatement of penalties will be in writing and will set forth the reasons for the failure to file the return and pay the tax timely. The Mayor will report all penalty abatements to the City Council at the next regular City Council meeting. Section 441A:30. Tax Deternuned by the City Council. Subd. 1. If the operator refuses to collect the tax imposed or fails to make the required reports, the Finance Director will obtain facts and information and make an estimate of the amount of tax due and report to the City Council for approval. After approval by the City Council, the Finance Director will give the operator a statement of the tax due to his estimate and give notice personally or through registered mail to such operator of the amount due. Depending upon the time periods as specified in Section 441A:25 of this Code, the amount of tax estimated will include the applicable penalties and interest. Payrnents will be made within ten days after receipt of notice. For the purpose of carrying out the provisions of this section, the Finance Director will have the right of access to the books and records of the operator. Subd. 2. The operator will have ten days after receipt of notice to make a written application for a hearing on the assessed tax to the Finance Director. If no request is made during this ten day period, the amount specified in the statement of the Finance Director, including penalties and interest, becomes fmal and payable within ten days. Subd. 3. If a hearing is properly requested, the running of the time periods described in Section 441A:25 of this Code are automatically stayed.Notice of the hearing will be given to the operator at least ten days in advance. All hearings are to be held before the City Council. The Council may then determine the amount due,when it will be paid, and whether or not the penalty time period under Section 441A:25 of this Code will resume running until payment. Once the amount due becomes fixed under either Subdivision 1, 2, or 3, of this section, any further steps necessary to ensure collection may be taken by the City Attorney. Section 441A:35. Administration. The Mayor will be charged with the responsibility for enforcement and administration of Section 441A. Section 441A:45. Deposit in Special Purpose Fund. All revenues collected pursuant to Section 441A will be deposited in a special purpose fund,hereby established, to be known as the "Hotel-Motel Tax Fund." Section 441A:50. Distribution. Distribution of all revenues relating to five percent (5%) of the charge made by the operator and collected pursuant to Section 441A will be in accordance with the percentages established in Section 441A:07 and will be used for the purpose of the advancement of the City of St. Cloud as a tourist and convention center or the promotion, operation and maintenance of the convention center facility and related facilities, all in accord with the enabling legislation. The City of St. Cloud may retain a sum not to exceed the actual amount of its costs incurred in the collection and administration of this tax. The following budgeting practices will be utilized by recipients of revenues to be utilized for the purpose of the advancement of the City of St. Cloud as a tourist and convention center: (a) The budget submitted to the City will be in the same form and format that is being used by the City of St. Cloud. Periodically,but not less than quarterly, the recipient will submit a financial statement showing revenue and expenditures along with budget figures. This statement will use the same object codes used by the City. (b) The City will deliver to the recipient budget preparation materials at about the same time City departments receive budget materials. The materials will contain budget preparation instructions, budget forms, and a submission deadline. The recipient will be responsible for preparing and submitting its budget as prescribed in the preparation materials. (c) Recipients of revenues from the City will separately budget and account for those revenues and expenditures of those revenues apart from non-City revenues which a recipient may receive or expenditures which a recipient may make. CHAPTERS VII&VIII GENERAL REGULATIONS ORDINANCE 80 HOTEL TAX Section 80.1. Definitions. The word or words defined in this Section shall have the meaning described in the subdivisions which follow. Subd. 1. Hotel. The furnishing, for a consideration, of lodging by a hotel,tourist court, or motel, and the granting of any similar license to use real property other than the renting or leasing of the property for a continuous period of thirty(30)days or more. Subd. 2. O�erator. The person who is the proprietor of the hotel whether in the capacity of owner, lessee, sublessee,licensee, or any other capacity, is an operator. Section 80.2. Imuosition of Tax. For the privilege of occupancy of any hotel, each person shall pay a tax in an amount established by the City Council and set forth in Exhibit B— Waite Park Schedule of Fees Charges of the charge made to the operator of the hotel or the establishment at the time the charge is paid. Those persons qualifying under paragraph one of this section shall pay the t�to the operator of the hotel or the establishment at the time the charge is paid. This tax constitutes a debt owed to the City by the operator and is extinguished only by payment to the City. se�uon so.a u�c�a si2oos Section 80.3. Collections. Subd. 1. Operator's Duties. Each operator shall collect the tax imposed by this Code at the time the rent is paid. The amount of tax shall be separately stated from the rent charged. Those persons paying the tax shall receive a receipt of payrnent from the operator. Subd.2. Reports. Each operator collecting such talc shall make a report upon forms distributed to the operator by the City Clerk. Such reports shall contain, at a minimum: A. The amount of room rentals collected. B. The amount of tax required to be collected and due for the period. C. The signature of the operator or that of the agent if the operator has not made the report. D. The period the return covers. E. The amount of room rentals collectible. 80-1 CHAPTERS VII&VIII GENERAL REGULATIONS F. Such additional information as the City Council, in its discretion, from time to time requires. Subd.3. Payment to the Citv. The operator shall submit payment of the tax to the City along with the required reports. Payment shall cover the tax due for the preceding calendar month, or any alternative four-week accounting period,whichever the case shall be, and such payment shall be made no later than twenty-five(25)days after the end of such calendar or alternative accounting month. Subd.4. Exanunation of Return. After a return is filed, the City Clerk may make any examination of the records for determining its correctness. The tax computed on the basis of the examination sha11 be the tax to be paid. If the tax due is found to be greater than that paid,the excess shall be paid within ten(10)days after the receipt of notice. The notice shall be given either personally or sent by registered mail to the address listed on the return. If the talc paid is greater than the tax found to be due,the excess paid shall be refunded to the operator at the address listed on the return. Section 80.4. Tax Determined bv the City Council. Subd. l. Tax Estimate. If the operator refuses to collect the tax imposed or fails to make the required reports,the City Clerk shall obtain facts and information and make an estimate of the amount of tax due and report to the City Council for approval. After approval by the City Council, the City Clerk shall give the operator a statement of the tax due to the Clerk's estimate and give notice personally or through registered mail to the operator of the amount due depending upon the time periods as specified in this ordinance,the amount of tax estimated shall include the applicable penalties and interest. Payments shall be made within ten Jays after receipt of notice. For the purpose of carrying out the provisions of this section, the City Clerk shall have the right of access to the books and records of the operator. Subd.2. Request for Hearin�. The operator shall have ten(10)days after receipt of notice to make a written application for a hearing on the assessed tax to the City Clerk. If no request is made during this ten(10)day period,the amount specified in the statement of the City Clerk, including penalties and interest,becomes final and payable within ten(10)days. Subd.3. Hearin�. If a hearing is properly requested, the running of the time periods described in this ordinance are automatically stayed. Notice of the hearing shall be given to the operator at least ten(10)days in advance. All hearings are to be held before the City Council. The Council may then deternune the amount due, when it shall be paid, and whether or not the penalty time period under this ordinance shall resume running until payment. The City Attorney may take any further steps necessary to ensure collection. Section 80.5. Administration. The City Clerk shall have responsibility for enforcement and administration of this Ordinance. Section 80.6. Violations. Violation of any provision of this ordinance shall be a misdemeanor. 80-2 CHAPTERS VII &VIII GENERAL REGULATIONS Section 80.7. Deposit in Sqecial Purpose Fund. All revenues collected pursuant to this ordinance shall be deposited in a special purpose fund, known as the"Hotel-Motel Tax Fund". Section 80.8. Distribution. Distribution of all revenues collected pursuant. to this Ordinance shall be under budget approved annually by the City Council and shall be used for the purpose of the advancement of the City as a tourist and convention center. The City may retain a sum not to exceed the actual amount of its costs incurred in the collection and administration of this tax. Any amounts collected by the City but not expended annually shall be held in a special purpose fund established in this ordinance and may be budgeted for future promotion,or used for development of new facilities which shall benefit the tourist industry. Amended 6/5/Ol 80-3 EDA Agenda Item 5 MEETING DATE: November 18, 2015 AGENDA ITEM: Lodging Tax/Visitor's Bureau SUBMITTED BY: Finance/Administration BOARD/COMMISSION/COMMITTEE/COUNCIL RECOMMENDATION: N/A PREVIOUS EDA ACTION: None BACKGROUND INFORMATION: Staff has done some research on setting up a lodging tax for the City of St.Joseph. MN Statute 469.190 allows the City to charge up to a 3%local lodging tax if 95%of the revenue raised is used for tourism promotion. The tax provides another way to bring visitors to St.Joseph. Over 400 Minnesota cities have adopted such tax;a few have special legislation to charge a higher rate. Of the communities I looked into, all have set up a local tourism and visitor's bureau. Some of the communities operate the tourism bureau as a board under the City Councils, others through the local Chambers or a separate 501 (c)(3)organization. Based on the number of establishments offering temporary lodging in St.Joseph,it may operate best to establish a visitor's bureau as a board under the City Council or EDA. With the proposed hire of the Community Development Director,the range of duties include marketing St.Joseph. It seems natural to market a visitor's bureau as an addition to what will already be done. There are no Minnesota Statutes that specify how a visitor's bureau has to be established. St.Joseph could determine the best way to set up. Statutes state a statutory city council may establish and maintain a bureau of information and publicity for the purpose of furnishing 1. Information for tourists;2.Outdoor advertising of tourist and city information, and 3.Preparing,publishing, and circulating information and facts concerning recreational facilities and business and industrial conditions of the community. Some websites that might be of interest to visit for more information on how a visitor's bureau may look include the following: www.discoverstillwater.com http://visitmarshallmn.com/main/index.php www.saiatpetermn.gov/tourism-and-visitors-bureau http://www.visitsaukcentre.com/ www.cityoflittlefalls.com/cummuniiv/tourism hap://www.minnesotacvbs.com/ http://www.montevideomn.org/index.asp?SEC=427B4DBD-5718-4B9C-8490- D03763F5B076&DE=8105BD18-AA30-4EF0-978B-82A6FFDFF025&Type=B_BASIC The lodging tax would be administered locally with projects kept within the City. If the City of St.Joseph establishes the lodging tax an idea of projects should also be proposed. A portion of the funds will be used for marketing costs and administration. St.Cloud identifies specific projects that will be funded with their lodging tax. In St.Cloud,they support the St.Cloud Convention and Visitor's Bureau,Civic Center,Community Festival,Municipal Athletic Complex and Municipal Gardens. The only restriction St.Joseph has is 95%of the proceeds have to be used on local convention and tourism bureau. St.Joseph will identify the projects under these terms. If the EDA is interested in recommending the lodging tax to the City Council,it may be best to also propose possible projects that could be funded. The amount of lodging tax available in St.Joseph is not significant today. The tax would be collected from the Super 8 Motel, CSB, St.Benedict's Hermitages and Rolling Ridge Event Center. The first year or two may generate$5,000- $10,000 in lodging tax conservatively. The City can also allow outside hotels,rooming houses, camp grounds,lodges to participate to generate more revenue and market their businesses under St. Joseph's program. As St.Joseph grows,the potential for additional lodging tax to market the City will also grow. Staff is requesting the EDA to consider the interest in establishing the lodging tax and setting up a visitor's bureau to market businesses, activities, events in St.Joseph. If interested,project ideas should also be discussed. BUDGET/FISCAL IMPACT: $5,000 - $10,000 ATTACHMENTS: Request for EDA Action—Lodging Tax/Visitor's Bureau Minnesota Statute 469.190 REQUESTED COUNCIL ACTION: Consider establishing a recommendation to establish a lodging tax and setting up a visitor's bureau to market businesses, activities and events in St. Joseph. If considered, also discuss potential project ideas. I MINNESOTA STATUTES 2015 469.190 469.190 LOCAL LODGING TAX. Subdivision 1.Authorization.Notwithstanding section 477A.016 or any other law,a statutory or home rule charter city may by ordinance, and a town may by the affirmative vote of the electors at the annual town meeting, or at a special town meeting, impose a tax of up to three percent on the gross receipts from the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it for a continuous period of 30 days or more.A statutory or home rule charter city may by ordinance impose the tax authorized under this subdivision on the camping site receipts of a municipal campground. Subd. 2. Existing taxes. No statutory or home rule charter city or town may impose a tax under this section upon transient lodging that,when combined with any tax authorized by special law or enacted prior to 1972, exceeds a rate of three percent. Subd.3.Disposition of proceeds.Ninety-five percent ofthe gross proceeds from any tax imposed under subdivision I shall be used by the statutory or home rule charter city or town to fund a local convention or tourism bureau for the purpose of marketing and promoting the city or town as a tourist or convention center. This subdivision shall not apply to any statutory or home rule charter city or town that has a lodging tax authorized by special law or enacted prior to 1972 at the time of enactment of this section. Subd.4.Unorganized territories.A county board acting as a town board with respect to an unorganized territory may impose a lodging tax within the unorganized territory according to this section if it determines by resolution that imposition of the tax is in the public interest. Subd. 5. Reverse referendum. If the county board passes a resolution under subdivision 4 to impose the tax, the resolution must be published for two successive weeks in a newspaper of general circulation within the unorganized territory,together with a notice fixing a date for a public hearing on the proposed tax. The hearing must be held not less than two weeks nor more than four weeks after the first publication of the notice. After the public hearing, the county board may determine to take no further action, or may adopt a resolution authorizing the tax as originally proposed or approving a lesser rate of tax.The resolution must be published in a newspaper of general circulation within the unorganized territory. The voters of the unorganized territory may request a referendum on the proposed tax by filing a petition with the county auditor within 30 days after the resolution is published. The petition must be signed by voters who reside in the unorganized territory. The number of signatures must equal at least five percent of the number of persons voting in the unorganized territory in the last general election. If such a petition is timely filed,the resolution is not effective until it has been submitted to the voters residing in the unorganized territory at a general or special election and a majority of votes cast on the question of approving the resolution are in the affirmative. The commissioner of revenue shall prepare a suggested form of question to be presented at the referendum. Subd. 6. Joint powers agreements. Any statutory or home rule charter city, town, or county when the county board is acting as a town board with respect to an unorganized territory, may enter into a joint exercise of powers agreement pursuant to section 471.59 for the purpose of imposing the tax and disposing of its proceeds pursuant to this section. Subd.7.Collection.The statutory or home rule charter city may agree with the commissioner of revenue that a tax imposed pursuant to this section shall be collected by the commissioner together with the tax Copyright(0 2015 by the Revisor of Statutes,State of Minnesota.All Rights Reserved. 469.190 MINNESOTA STATUTES 2015 2 imposed by chapter 297A, and subject to the same interest,penalties, and other rules and that its proceeds, less the cost of collection, shall be remitted to the city. History: 1987 c 291 s 191; 1989 c 277 art I s 30; 1 Sp1989 c I art 8 s 1-3; 1990 c 604 art 6 s 6-8 Copyright©2015 by the Revisor of Statutes,State of Minnesota.All Rights Reserved.