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HomeMy WebLinkAbout[08] Request for Exemption, Lodging Tax - CSB 11 Council Agenda Item 8 MEETING DATE: June 6, 2016 AGENDA ITEM: Request for Exemption, Lodging Tax- CSB SUBMITTED BY: Administration PREVIOUS COUNCIL ACTION: On March 7, 2016 the City Council considered the request of the EDA to create an Ordinance establishing a Lodging Tax and supported the concept and requested that the Ordinance be drafted for consideration. On May 2, 2016 the City Council adopted Ordinance 610, Lodging Tax with an implementation date of June 1, 2016. The Ordinance was published in the St. Joseph Newsleader on May 6, 2016,becoming effective that date. On May 16, 2016 the City Council amended Ordinance 610 to correct the definitions. The Ordinance was published in the St. Joseph Newsleader on May 20, 2016, becoming effective on that date. BACKGROUND INFORMATION: The City received a letter from Sue Palmer on May 16 requesting exemption from the lodging tax it is the position of the College that the tax does not apply. In addition, the attorney for CSB (Tom Matthews), contacted Tom Jovanovich expressing objection and provided some information in which in his (Tom Matthews) opinion illustrated that the City does not have the authority to impose the tax on housing provided by CSB. Tom Jovanovich reviewed the information and has indicated that the information illustrates the City does have the authority. Following is the letter from Tom Jovanovich to Tom Matthews stating that the City does have the authority along with the information provided by Matthews and email correspondence. St. Joseph is not the only City to implement the lodging tax and apply to short term lodging for universities or colleges. I will get that information and forward. You will notice in the following information that the City of St. Cloud does collect the lodging tax for the Gorecki Guest House operated by the St. Cloud Hospital. Admittedly they agreed to submit the tax. As a reminder that 90% of the funds collected for the lodging tax must be used for promoting and marketing tourism. The funds are kept in a special fund with over sight of a committee. The City has the option of creating our own visitor/marketing center, becoming part of the St. Cloud Visitor's Center or partnering with another City such as Waite Park and/or Sartell. Projects that could be completed with funds would include creating a marketing video for St.Joseph, creating marketing brochures,placing ads for St. Joseph, using for improvement projects that promote visitor such as downtown. These are just examples of what can be done. If we become part of St. Cloud we would be part of a larger organization. The Ordinance that was adopted is the same as the other communities. At this time the City only has one hotel and the short term lodging provided by CSB. At some point we hope to have another hotel and it would be better to have the Ordinance in place before another hotel approaches the City. I have also attached some miscellaneous information. The first is the information of the Minnesota Department of Revenue, illustrating that sales tax applies to lodging and all the area cities benefit from this. The second is the rates for housing for an upcoming conference at the College of St. Benedict. BUDGET/FISCAL IMPACT: ATTACHMENTS: Request for Council Action City Attorney Information Request Letter, Susan Palmer Information Provided by CSB Attorney MN Department of Revenue Information Sheet Rates for Summer Conference - CSB Ordinance 610—Lodging Tax REQUESTED COUNCIL ACTION: Determine whether or not to exempt the College of St. Benedict from the lodging tax. Jovanovich, Kadlec Athmann,PA ATTORNEYS AT LAW THOMAS G.JOVANOVICH 1010 WEST ST. GERMAIN,SUITE 420 SUSAN M. KADLEC+ ST. CLOUD, MN 56301 LORI L.ATHMANN OFFICE: 320-230-0203 JESSIE L. SOGGE* FAX: 320-230-0188 KRISTI D. STANISLAwsiu THOMAS G. JOVANOVICH Thomas.Jovanovich@jkalawfirm.com June 1, 2016 VIA EMAIL tmathews a,hughesmathews.com Tom Mathews HUGHES MATHEWS GREER, P.A. District Square 622 Roosevelt Road, Suite 280 St. Cloud, MN 56301 Re: City of St. Joseph Lodging Tax Ordinance Our File No. 40986 Dear Tom: This letter is in response to a telephone call I had with you on May 26, 2016,regarding the St. Joseph Lodging Tax Ordinance. Following the telephone call, you sent me some additional information with respect to Minnesota Statute 469.190 dealing with lodging taxes. My notes from our telephone call indicated that you believed that both the St. Joseph lodging tax (as applied to the College of St. Benedicts) and the St. Cloud lodging tax (as applied to the Gorecki building located across the street from the St. Cloud Hospital) are not authorized by Minnesota Statute 469.190. You believed that both ordinances, as applied to the above two institutions,were wrong. I understand your basic argument to be that dormitories are not hotels or rooming houses and therefore should not be taxed under MS 469.190 which applies to"hotel, motel,rooming house, .... other than the renting or leasing of it for a continuous period'of 30 days or more." You stated that the statutory definition applies to the physical facility rather than the service provided. I have reviewed the material which you have provided,which includes the following: • A memo to Sue Palmer at the College of St. Benedicts regarding the City's proposed lodging tax ordinance, dated April 8, 2016. I • Information brief from the Minnesota Department of Health, dated January 29, 2016. • Information brief regarding the legislative history of lodging taxes in Minnesota, dated August, 2012. ®Qualified ADR Neutral +Certified Real Property Law Specialist *Also admitted in Wisconsin June 1, 2016 Page -2- i I have shared the above material with the City of St. Joseph. I have reviewed the material you have provided, as well as an additional statutory definition of a hotel. Based on this review, I don't believe the material supports your position. First, your memo of April 8, 2016, addressed to Sue Palmer does not address the current amended St. Joseph Lodging Tax Ordinance. The operative language in the current ordinance is as follows: Section 610.02: Definitions. i Subd. 1: Hotel or Motel: Hotel or Motel or similar establishment means any building or portion thereof containing six or more guest rooms intended or designed to be used, or which are used, rented,hired out to be occupied, or which are occupied for sleeping purposes by guests for a period of less than 30 continuous days. Subd. 2: Rooming House: Rooming House or similar establishment means any building or portion thereof containing not more than five guest rooms intended or designed to be used, or which are used,rented,hired out to be occupied, or which are occupied for sleeping purposes by guests for a period of less than 30 consecutive days. The amended ordinance clearly encompasses and applies to the rental of rooms by St. Benedicts during the summer months. Second, the rental of rooms by St. Benedicts during the summer months fits within the definition of a hotel or motel based on the information memorandum from the Minnesota Department of Health regarding Lodging in Minnesota, dated January 29, 2016. In the Minnesota Department of Health memo on lodging, the definition of a hotel is provided. There, a hotel was defined as "a building or structure, ... or any part thereof used as,maintained as, advertised as, or held out to be a place where sleeping accommodations are furnished to the public and furnishing accommodations for periods of less than one week." The rental of lodging by St. Benedicts during the summer certainly falls within this definition. The definition makes no distinction between the physical facility and the service provided. Third, I have also reviewed Minnesota law with respect to defining a"hotel". Minn. Stat. 327.70 Subd. 3 defines "hotel" as "a hotel,motel,resort,boarding house,bed and breakfast, furnished apartment house or other building,which is kept,used or advertised as, or held out to the public to be, a place where sleeping or housekeeping accommodations are supplied for pay to guests for transient occupancy." Subd. 5 of that same section defines "transient occupancy" as "occupancy when it is the intention of the parties that the occupancy will be temporary. There is a rebuttable presumption that, if the unit occupied is the sole residence of the guest, the occupancy is not transient. There is a rebuttal presumption that, if the unit occupied is not the sole residence of the guest,the occupancy is transient." Again this Minnesota statutory definition of hotel I i I June 1, 2016 Page -3- encompasses the rental of rooms by St. Benedicts during the summer months and at other times when rooms are rented to non-students for less than 30 days. If you have other law or arguments to the contrary,please advise. However,based on the statutes which I have reviewed and the information which you have provided,it appears that the various definitions of a"hotel" do encompass the type of rentals St. Benedicts conducts during the summer months. The definitions apply to the type and length of service provided and not to the physical facility itself. Sincerely, JOVANOVICH, KA &ATHMANN, PA By Tho as G. To nova Attorney at w TGJ/baw C. Judy Weyrens (via email) I I i I From:Thomas Jovanovich [mailto:Thomas.Jovanovich@jkalawfirm.com) Sent:Tuesday, May 31, 2016 12:13 PM To:Judy Weyrens<jweyrens@cityofstjoseph.com>, Cc: Brenda Wolbeck<Brenda.Wolbeck@jkalawfirm.com> Subject: FW: lodging tax 1udY, On May 26,Tom Mathews called me on behalf of the College of St. Benedicts. He stated that he believes that both the St.Joseph lodging tax(as applied to the College of St. Bens) and the St. Cloud lodging tax(as applied to the Gorecki building located across the street from the St.Cloud hospital)are not authorized by Minnesota Statute 469.190. He stated that "both St. Cloud and St.Joe are dead wrong." He then followed up with the email below and the first two attachments listed above. His basic argument is that dormitories are not hotels or rooming houses and therefore should not be taxed under MS 469.190 which applies to "hotel, motel, rooming house, ....other than the renting or leasing of it for a continuous period of 30 days or more." His argument is that the statutory definition applies to the physical facility rather than the service provided. I have reviewed the material he has provided. I don't believe the material supports his position. First, his memo of April 8, 2016 addressed to Sue Palmer does not analyze the St.Joseph lodging tax as amended. The amended ordinance clearly applies to the rental by St. Ben's during the summer. Second, the rental of rooms by St. Ben's during the summer fits within the definition of a hotel or motel based on the attached documents to Tom Mathew's memo. He attached a Minn. Department of Health memo on lodging in Minnesota. There a hotel was defined as"a building or structure, ...or any part thereof used as, maintained as,advertised as,or held out to be a place where sleeping accommodations are furnished to the public and furnishing accommodations for periods of less than one week." The rental of Iodging by St. Ben's during the summer certainly falls within this definition. The definition makes no distinction between the physical facifity and the service provided. I have also attached the statutory definition of a "hotel" under Minnesota law. Minn.Stat. 372.70 Subd. 3 defines "hotel" as"a hotel motel, resort, boarding house, bed and breakfast,furnished apartment house or other buildin�, which is kept used or advertised as, or held out to the public to be a place where sleepin�or housekeeping accommodations are supplied for pav to�uests for transient occupancv." Subd. 5 defines"transient occupancy" as "occupancy when it is the intention of the parties that the occupancy will be temporary. There is a rebuttable presumption that, if the unit occupied is the sole residence of the guest,the occupancy is not transient. There is a rebuttal presumption that, if the unit occupied is not the sole residence of the guest,the occupancy is transient." Again this Minnesota statutory definition of hotel encompasses the rentals of rooms by St. Ben's during the summer months and at other times when rooms are rented to non-students. If you have any questions, please advise. Thomas G.Jovanovich 1 Jovanovich, Kadlec&Athmann, PA 1010 W. St. Germain, Suite 420 St. Cloud, MN 56301 (320) 230-0203 Thomas.Jovanovich@ikalawfirm.com From;Tom Mathews [mailto:tmatMews�hu,ghesmathews.com] Sent: Thursday, May 26, 2016 4:05 PM To: Thomas Jovanovich Subject: lodging tax f would appreciate your comments after you have reviewed the attached items. As I indicated on the phone, formal request for exemption will be made as of June 1St to preserve CSB's standing to contest the ordinance. NOTE: This e-mail transmission may contain information which is confidential or privileged at�aw. If you are not the intended recipient,do not read,distribute, reproduce,transmit, or d'+sseminate this transmission. If this e-mail transmission was received in error, please contact the sender and delete the transmission immediately. This e-mail transmission (including attachments)is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. Any transmission, dissemination, retention, reading,viewing, or other use of the information contained herein or attached hereto by any person other than the intended recipient is prohibited. Thomas E. Mathews . ► � = t' t� �: � �• �: �w District Square 622 Roosevelt Road, Suite 280 P O Box 548 St. Cloud, MN 56302-0548 www.huqhesmathews.com 320.251.4399 320.251.5781 Fax ****Internet E-Mail Confidentiality Statement**** Information contained in this e-mail transmission is intended only for the use of the addressee(s)named above and is privileged and confidential. If you not the addressee, or the person responsible for delivering it to the addressee, you are hereby notified that any reading or dissemination, distribution or copying of this communication or any of its contents is strictly prohibited. If you have received this communication in error,please notify us immediately by replying to the message and immediately delete the original message and any copy of it. Thank you. IF THIS E-MAIL MESSAGE CONTAINS ATTACHED FILES AND DOCUMENTS, PLEASE NOTE THE FOLLOWING INFORMATION: These files and documents are legal documents that have been prepared by Jovanovich Kadlec & Athmann, PA as drafts or final executable versions of the documents. These files and documents should only be printed for further review or execution as instructed. Any alteration, modification, addition, deletion or any other changes to these documents may result in changes to the legal effect of these documents and the rights and remedies of parties involved. ACCORDINGLY, YOU ARE ADVISED NOT TO CHANGE THE TEXT OR FORMAT OF ANY OF THE ATTACHED FILES AND DOCUMENTS UNLE5S SUCH CHANGES ARE REVIEWED AND APPROVED BY YOUR LAWYER. JOVANOVICH KADLEC & ATHMANN, PA HAS NO RESPONSIBILITY UNDER ANY CIRCUMSTANCES FOR ANY CHANGES OR MODIFICATIONS MADE BY YOU TO THE ATTACHED FILES AND DOCUMENTS. ****Internet E-Mail Confidentiality Statement**** Information contained in this e-mail transmission is intended only for the use of the addressee(s) named above and is privileged and confidential. If you not the addressee, or the person responsible for delivering it to the addressee, you are hereby notified that any reading z May 16, 2016 City of St. Joseph, MN Attn: Judy Weyrens, Administrator City Hall 25 College Avenue North St. Joseph, MN 56374 Re: Lodging Tax, Ordinance 610 This letter constitutes a request for exemption from the lodging tax. This notice is made pursuant to Section 610.06, subd.L(b). The lodging provided by College of Saint Benedict is not within the scope of Section 610.01, subd.1. The lodging furnished by College of Saint Benedict does not qualify as that by a hotel, motel, rooming house/facility, tourist court or resort. Any application of the City's Ordinance 610 to the lodging furnished at the College is in violation of Minnesota Statute Section 469.190. Very truly yours, Susan Palmer Vice President for Finance and Administration F:\CLIENT\103 CSB\00001 GENERAL\SLBFILES\CITY LODGING TAX\DRAFT LETTERPOC HUGHES M.ATHEWS GREER,.P.A. To: Sue Palmer College of St. Benedict From: Tom Mathews Re: City's Proposed Lodging Tax Ordinance Date: April 8, 2016 From my research and analysis of the proposed lodging tax ordinance, CSB's charges for its camps and summer use of its facilities is outside the scope of the ordinance. I have reviewed the following: • Minnesota Statute Section 469.190, Lodging Tax (a copy is attached). • St. Joseph's proposed Ordinance 610. • Information Brief dated August 2012. • Sample ordinances for the cities of St. Cloud, Waite Park, Sauk Rapids, Little Falls, and Stillwater. A local governmental entity has no legal authority to enact the lodging tax unless such tax is in compliance with Minn. Stat. § 469.190. The Information Brief provides a good explanation and background to the law. It is important to note the exact language of the statute: "... impose a tax of up to three percent on the gross receipts from the furnishing for consideration of lod in at a hotel motel rooming house,_ tourist court, or resort, other than renting or leasing of it for a continuous period of 30 days or more." Ordinance 610.03, Subd. 1 adopts the statutory language with the change noted: "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 continuous period of 30 days or more." If Ordinance 610 is an attempt to expand on the scope of the statutory language, somehow to read that both rooming houses and rooming facilities are permitted to be taxed, then "rooming facilities" would be in violation of the explicit statutory language. If "facilities" is merely a clarification that "homes and facilities" are used conjunctively, then there would be no expansion of the scope from the statute. Sue Palmer College of St. Benedict April 8, 2018 Page No. 2 It is clear that CSB's summer camps would not be considered lodging at a hotel, motel, tourist court, or resort. The issue is whether such would be considered as lodging furnished at rooming houses/facilities (?) I did a brief check of CSB's website to view the summer activities. There are various sports camps that run several days and appear to provide lodging and probably food. The music camp prices its activities based on room or day only. The only reference in the City's ordinances relating to lodging houses/facilities I found was in the zoning code: Subd. 54: Lodging House Dormitories, Fraternities and Sorority Houses. A building or place where lodging is provided (or which is equipped regularly to provide lodging) by prearrangement for definite periods, for compensation, for three or more individuals, not open to transient guests, in contra distinction to hotels open to transients. Lodging houses, dormitories, fraternities, sorority houses, boarding houses and rooming houses shall only be permitted in R-3, multiple dwelling districts, except within the boundaries of a college campus. I do not believe that this definition of a lodging house, found in the zoning code, applied to the lodging tax. I could find no reference in the City's website that the City charges a license fee for or any regulation of a lodging house, hotel, tourist court, or resort. Lodging establishments in Minnesota must be licensed (see the attached information from the Minnesota Department of Health). The license can be by the city, such as done by the City of St. Cloud. I have not checked, but I believe the county could license_ The definition of lodging establishment is found in Minnesota Statute § 157, Subd. 8. "Lodging establishment" means: (1) a building, structure, enclosure, or any part thereof used as, maintained as, advertised as, or held out to be a place where sleeping accommodations are furnished to the public as regular roomers, for periods of one week or more, and having five or more beds to let to the public; or (2) a building, structure, or enclosure or any part thereof located within ten miles distance from a hospital or medical center and maintained as, advertised as, or held out to be a place where sleeping accommodations are furnished exclusively to patients, their families, and caregivers while the patient is receiving or waiting to receive health care treatments or procedures for periods of one week or more, and where no supportive services, as defined under section 157.17, subdivision 1, paragraph (a), or health supervision services, as defined under section 157.17, subdivision 1, paragraph (b), or home care services, as defined under section 144A.471, subdivisions 6 and 7, are provided. Care is needed when using a local city as a comparison. For instance, St. Cloud's ordinance made an addition to the scope: ".. , lodging by a hotel, tourist court, or motel, and the granting of any similarlicense to use real property. - ." St. Cloud included "lodging houses" within the Sue Palmer College of St. Benedict April 8, 2016 Page No. 3 scope and does require city licenses for lodging houses. Waite Park's ordinance follows St. Cloud's scope of the tax; Sauk Rapids' ordinance applies only to motels. It is my opinion that the College of St. Benedict is not a "lodging establishment" under Minnesota law and is not within the definition of "lodging houses/facilities" under St. Joseph's proposed Ordinance 610. 1W10090116u6 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 of the 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 trust 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 ofrevenue that a tax imposed pursuant to this section shall be collected by the commissioner together with the tax Copyright © 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; 1Sp1989 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. Page 1 of 2 MMinnesota Department of Health htt p: I Jwww. health. state.mn. us/ index. htm l) Lodging in Minnesota Lodging establishments meeting the following definitions must be licensed in Minnesota. Definitions Lodging establishment A building, structure, enclosure, or any part thereof used as, maintained as, advertised as, or held out to be a place where sleeping accommodations are furnished to the public as regular roomers, for periods of one week or more, and having five or more beds to let to the public. Hotel or Motel A building, structure, enclosure, or any part thereof used as, maintained as, advertised as, or held out to be a place where sleeping accommodations are furnished to the public and furnishing accommodations for periods of less than one week. Resort A building, structure, enclosure, or any part thereof located on, or on property neighboring, any lake, stream, skiing or hunting area, or any recreational area for purposes of providing convenient access thereto, kept, used, maintained, or advertised as, or held out to the public to be a place where sleeping accommodations are furnished to the public, and primarily to those seeking recreation for periods of one day, one weep, or longer, and having for rent five or more cottages, rooms, or enclosures. Boarding establishment A food and beverage service establishment where food or beverages, or both are furnished to five or more accommodations, for periods of one week or more. Bed & Breakfast Owner occupied establishments which offer lodging and breakfast, without a limitation on the number of rooms offered. if breakfast is offered to more than 10 persons, a commercial kitchen is required. Many Care Facilities are regulated by the Health Regulation Division within MDH. Please visit the following link for more information: • Minnesota Health Care Facilities Programs (http://www-health-state.mn.us/divs/fpc/index.htm_l Licenses Required Per Type of Lodging Lodging License Type Number of Units Duration of Stay Additional Licenses Which May be Needed Bed & Breakfast 1 or more 1 night or longer Food (see: Bed and Breakfast Operations htt www.health.state.mo.us divs eh food license bedbreakfast.html Resort 5 or more 1 night or more Food and Beverage (see: Food Business Licensin htt www.health_state.mn.us divs Jeh1food license index.html Swimming Pool -Spa Pool (see: Public Swimming Pools htt www.health,state.mn.us divs eh ools index.html)) Lodging 5 or more One week or more A Special Services Registration may be required (see: Boarding and Lod in with Special Services tht"if/www.health-state.rnn.us/divs/eh/lodciinciiblss.htmi)or Housine with Services (ht t www.health.state.mn.us divs f c rofinfo lic lichws.htm ) http://www.health.state.nm.us/divs/eh/lodging/ 41712016 Page 2 of 2 Lodging Number Duration Additional Licenses Which May be Needed License Type of Units of Stay Boarding 5 or one Food (see: Food Business Licensing Establishment more week or itttwww.health.state.mn.usldivs/eh food license/index. htmi) more Hotel/Motel 1 or One day Food (see. Food Business Licensing more or longer htt www.health.state.mn.us divs eh food license index.html Swimming Pool -Spa Pool (see: PLiblic Swimming Pools Shttp//www.health.state.mn.us/divs(eh1pools/index.htmi) ) Vacation 1 or One day Visit Explore Minnesota: Vacation Home Rental Home Rentals more or longer htt /www.exploreminnesota.com industr-minnesota tools- training/vacation-home-rentals / licensi nq-plan-review-for-minnesota- vacation-home- rentals/ index.as x for more information. A hotel/motel license may be required. Housing with Services and Board and Lodging with Special Services establishments provide sleeping accommodations for residents. A lodging license may be required. if food is provided, a boarding license may also be required. Please contact the appropriate licensing authority to determine if a lodging or boarding license is necessary: • Minnesota State and Local Food, Pools and Lodging Contacts PDF] htt www.health,state.mn.us divs eh food license locals. d • Housin with Services Establishments/Assisted Living Desi nation Unif rm Consumer Information Guide htt www. health.state.mn.u5 Idivs f c rofinfo lic Iichws.htm • Boarding and Lodging Establishments or Lodging Establishments Providing Special Services Registration htt www. health. state. mn.us divs f c rofinfo lic licblss.html • Licensing: Food Beverage. and Lodging htt www.health.state.mn.us/divs/eblfoodllicense/`) 651-201-5000 Phone 888-345-0823 Toll-free Information on this website is available in alternative formats to individuals with disabilities upon request. Updated Friday, January 29, 2016 at 03:03PM http://www.health.state.mn.us/divs/eh/lodging/ 417/2016 INFORMATION BRIEF Research Department Minnesota House of Representatives Local Lodging Taxes in Minnesota Lodging Taxes Prior to 1972 Prohibition Against Most Local Taxes in 1971 General Statutory Authority for Lodging Taxes Use of Local Sales Tax Revenue for First Class Cities Local Lodging Taxes Authorized under Special Law or City Charter Taxing Jurisdiction/ Authorizing Legislation and Year First Authorized Rate Use of Revenues/Other Comments Later Amendments Minneapolis – 1969 Total imposed rate 3.0% On facilities with fewer than 50 rooms 5.625% On facilities with 50 or more rooms Local Lodging Taxes Authorized under Special Law or City Charter Taxing Jurisdiction/ Authorizing Legislation and Year First Authorized Rate Use of Revenues/Other Comments Later Amendments Bloomington – 1970 Total imposed rate7.0% Duluth – 1970 Total imposed rate5.5% Local Lodging Taxes Authorized under Special Law or City Charter Taxing Jurisdiction/ Authorizing Legislation and Year First Authorized Rate Use of Revenues/Other Comments Later Amendments Rochester – 1970 . Total imposed rate4.0% St. Paul – 1970 Total imposed rate 3.0% On facilities with fewer than 50 rooms 6.0% On facilities with 50 or more rooms St. Cloud – 1979 Total imposed rate5.0% Towns of Tofte, 2.0% Lutsen, and Schroeder – 1987 Local Lodging Taxes Authorized under Special Law or City Charter Taxing Jurisdiction/ Authorizing Legislation and Year First Authorized Rate Use of Revenues/Other Comments Later Amendments Winona – 1991 1.0% Roseville – 1992 2.0% Two Harbors – 1994 1.0% Central Cities – 1998 0.5% Newport – 2003 4.0% Total imposed rate 4.0% Facilities with 25 or more rooms 0.0% Facilities with fewer than 25 rooms Local Lodging Taxes Authorized under Special Law or City Charter Taxing Jurisdiction/ Authorizing Legislation and Year First Authorized Rate Use of Revenues/Other Comments Later Amendments Itasca County – 2003 -- Hubbard County – -- 2005 Proctor – 2005 -- Giant’s Ridge 2.0% Recreation Area – 2010 (Biwabik) Marshall – 2010 Up to 1.5% 327.70. Definitions, MN ST § 327.70 Minnesota Statutes Annotated Trade Regulations, Consumer Protection (Ch. 324-341) Chapter 327. Hotels, Motels, Resorts, and Manufactured Homes Hotels • M.S.A. § 327.70 327.70. Definitions Currentness Subdivision 1. Terms. For the purposes of sections 327.70 to 327.76, the terms defined in this section have the meanings given them. Subd. 2. Guest. "Guest" means a person who is registered at a hotel and to whom a bedroom is assigned. The term "guest" includes members of the guest's family who accompany the guest. Subd. 3. Hotel. "Hotel" means a hotel, motel, resort, boarding house, bed and breakfast, furnished apartment house or other building, which is kept, used or advertised as, or held out to the public to be, a place where sleeping or housekeeping accommodations are supplied for pay to guests for transient occupancy. Subd. 4. Innkeeper. "Innkeeper" means an owner or operator of a hotel. Subd. 5. Transient occupancy. "Transient occupancy" means occupancy when it is the intention of the parties that the occupancy will be temporary. There is a rebuttable presumption that, if the unit occupied is the sole residence of the guest, the occupancy is not transient. There is a rebuttable presumption that, if the unit occupied is not the sole residence ofthe guest, the occupancy is transient. Subd. 6. Valuables. "Valuables" includes money, bank notes, bonds, precious stones, jewelry, ornaments, watches, securities, transportation tickets, photographic cameras, checks, drafts, and other negotiable instruments, business papers, documents, and other papers, and other articles of value. Credits Laws 1982, c. 517, § 1. Amended by Laws 1993, c. 151, § 1. Editors' Notes RESEARCH REFERENCES Treatises and Practice Aids 10 Minnesota Practice Series CRIMJIG 16.75, Fraud of Hotel or Restaurant Owner (Defrauding an Innkeeper)~Elements. NOTES OF DECISIONS WEMIAW © 2016 Thomson Reuters. No claim to > n<i it U 3. Go; mm-Mi Works. 327.70. Definitions, MN ST § 327.70 Innkeeper As a resort offering sleeping accommodations to the public in its houseboats, rental company met the statutory definition of an "innkeeper." Yang v. Voyagaire Houseboats, Inc., 2005, 701 N.W.2d 783. Innkeepers 0*' 3 M. S. A. § 327.70, MN ST § 327.70 Current with laws ofthe 2016 Regular Session through Chapter 96. The statutes are subject to change as determined by the Minnesota Revisor of Statutes. (These changes will be incorporated later this year.) End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works. WfcMlfW © 2016 Thomson Reuters. No claim to original U.S. Government Works. MINN�StJTA' REVENUE www.taxes.state.mn.us Hotels and Lodging Facilities , What's New in 2015 We clarified the information about complimentary services versus package deals. Lodging facilities must charge sales tax on short-term Lodging facilities include(but are not limited to): lodging and certain related services. This may also in- • bed and breakfasts clude local sales taxes or city lodging taxes.For more . hotels information, see fact sheets: . campgrounds � 164,Local Sales and Use Taxes . motels • 1645, Special Local Taxes . resorts • rooming houses Lodging is the rental of a room or rooms for a temporary , trailer camps place to stay or live. Charge sales tax on lodging and lodging-related services furnished for periods of: • vacation home rentals • less than 30 days; and • 30 days or more if there is no enforceable writ- ten lease agreement that requires the customer to give prior notice of their intention to terminate Lodging-related services Charges for services provided within a guest room are • in-room safes taxable. • laundry and dry cteaning services • pay-per-view movies and video games Examples: . room service or room delivery,including man- • cots,cribs,refrigerators,roll-away beds,and ex- datory tips and gratuities ercise equipment . telephone access charges in guest rooms • food or liquor from mini-bars and refrigerators Complimentary services versus package deals Supplies to provide complimentary services are taxed Note:A complimentary breakfast is when the customer differently than supplies used to provide package deals. has access to breakfast and the charge for their room is not affected if they eat the meal or not. Complimentary services Complimentary services(or items)are those given to the When complimentary services are provided,hotels and customer as a courtesy with no additional charge. lodging facilities must pay sales tax when thzy buy in- Examples: puts to those services.This includes disposable items such as plates,napkins, silverware,etc. • Complimentary breakfast • Free birthday dessert Hotels or lodging facilities providing complimentary • Free drink in response to a customer complaint items must pay sales tax on the purchase of those items. • Shampoo,conditioner,and soap Sales and Use Tax Division—Mail Station 6330—St.Paul,MN 55146-6330 This fact sheet is intended to help you become more familiar with Minnesota tax Phone;651-296-6181 or toll-free 1-800-657-3777 laws and your rights and responsibilities under the laws.Nothing in this fact sheet supersedes,alters,or otherwise changes any provisions of the tax law,administrative niles,court decisions,or revenue notices.Altemative fonnats available up�request. Stock No.28001A1,Revlsed htne 2015 Minnesota Revenue,Hotels and I,odging Facilities Package deals When a package deal is purchased,the customer A package deal is when the customer purchases a group pays sales tax on the entire cost of that package.Ho- of related products or services for one specified price. tels and lodging facilities may purchase inputs for these deals exempt for resale. Examples: • A"romance package"that might include a In this situation,disposable items can be purchased room,wine, dinner for two,and chocolate exempt because they are included in the t�able • Free children's meal price that was paid by the customer. • Two-for-one drinks Other taxable charges Admissions to recreational areas and fees to For more information, see fact sheets: use recreational facilities . 102A through E,Food and Food Ingredients, Recreational facilities includes campgrounds,golf cours- es,mini golf courses,picnic grounds,ptaygrounds,tennis Candy, Soft Drinks and Other Beverages,Pre- courts,health clubs,swimming beaches and pools. pared Food,and Dietary Supplements For more information,see Fact Sheet 123,Athletic Facili- • 105,Clothing ties,Recreational Areas,Resorts and Campgrounds. . 117A through F,Drugs,Grooming and Hygiene Copies Products;Durable Medical Equipment,Mobility Charges for copies are taxable,including coin-operated Enhancing Equipment;Prosthetic Devices; and machines. Health Product Exemptions Damage charges Newspapers and tabloids are not taxable.Magazines or Charges for damage to tangible items,such as equipment periodicals sold over the counter or through vending ma- or boats,are taacable. chines are taxable. Charges for damage to real property,such as a hotel Jukebox, pool table and electronic games room or building,are not taxable. Charges to use these devices are taxable. If the charge is a combination of tangible items and real `No show' charges property;the entire charge is taxable if the nontaxable "No show"charges are when the room was held for the portion is not separately stated. customer,but the customer did not arrive and failed to cancel the reservation.These charges aze taxable because Equipment sales a sale was made. Sales of surplus or used equipment or other items may be subject to sales tax. Parking fees Parking fees are taxable,including charges for valet For more information,see Fact Sheet 132,Isolated and parking and car washing. Occasional Sales. Rental of equipment Fax charges If charges to rent equipment are billed separately from a Chaxges to send a fax are taxable. nontaxable meeting room,they are taxable. Food and liquor sales This includes equipment such as audio-visual equipment, Lodging facilities that have a restaurant,bar,or eating computers,public address systems,tables,chairs,flowers establishment must charge tax on those sales. and decorations. For more information, see Fact Sheet 137,Restaurants Rental of games and recreational equipment and Baxs. Rental of games and recrearional equipment is taxable, including the rental of games,athletic equipment,boats, Gift shop sales paddle boats,canoes,and pontoons. Most gift shop sales are taxable,except for food,cloth- ing,and drugs 2 Mmnesota Revenue,Hotels and Lodging Facilities Family Discount (since 2014) A family consisting of one adult plus dependents is eligible for a 15%discount on Program Fees.Full-time students under age 24 are usually dependents.Note that a spouse or domestic partner is not considered a dependent. However, if the family consists of at least one adult and one dependent,then the discount also extends to a second adult spouse or domestic partner. Dependents are registered oldest to youngest,and third,fourth and fifth dependents will not be charged a program fee. A grandparent plus dependents also constitute an eligible family.("Dependent"means dependents of the grandparent,or dependents of another adult in the family who is not attending the Gathering.) See examples and read more about the Family Discount. If you are not eligible for a Family Discount,the first registrant indicates that s/he is"not registering with dependents" and subsequent registrants respond to the question"Which registrant are you?"with"Other adult without dependents." Back to too> ; 2016 Lodging & Campus Fees i - "Double"refers to a single bed in shared room with two beds Little Child=bi�th to 3 yrs •Child=4-6 yrs•Child=7-11 yrs •Youth=l2 yrs to rising ninth grade• ' High School=rising 10th grede-18 yrs and in HS program ��� I FULL-AND HALF-GATHERING FEES Full- Half- Full-Gathering � Gath Gath � Adult Adult High Yo�� Child 7- Child Lfttle I School 77 4�6 Child I Single,air conditioning $398 $199 n.a. n.a. n.a. n.a. n.a. � I Double,air conditioning $298 $149 n.a. $91 $91 $91 $91 � Single,no air conditioning $298 $149 n.a. n.a. n.a. n.a. n.a. Double,no air conditioning $198 $99 $155 $91 $91 $91 $91 i On floor(see Familv Housinq Notesl n.a. n.a. n.a. n.a. $5 $5 No charge I 'i e f/car/tent on camous(in addition to $85 $43 n.a. $10 $5 $5 c a e r9 Commuter $65 $33 n.a. $10 $5 $5 No charge iTent or RV site fee(in addition to oer $20 $20 n.a. n.a. n.a. n.a. n.a. � ; oerson feel � EARLY ARRIVAL ROOM FEE, � per night � Single,air conditioning $40 $40 n.a. n.a. n.a. n.a. n.a. I i Double,air conditioning $35 $35 n.a. $20 $20 $20 $20 I i Single,no air conditioning $35 $35 n.a. n.a. n.a. n.a. n.a. I ; Double,no air conditioning $30 $30 n.a. $20 $20 $20 $20 I j HS on floor(see conditionsl n.a. n.a. No charge n.a. n.a. n.a. n.a. I i Child on floor(birth—age 11) n.a. n.a. n.a. n.a. No No No � charge charge charge � Tent or RV site fee $8 $8 No charge No No No No �'I charge charge charge charge � Back to to�> CHAPTER VI—GENERAL REGULATIONS ORDINANCE 610 LODGING TAX Section 610.01: PURPOSE Section 610.02: DEFINITIONS Section 610.03: IMPOSITION OF TAX Section 610.04: DISTRIBUTION OF TAX Section 610.05: EXCEPTIONS AND EXEMPTIONS Section 610.06: COLLECTIONS Section 610.07: PENALTIES Section 610.08: TAX DETERMINED BY THE CITY COUNCIL Section 610.09: ADMINISTRATION Section 610.10: DEPOSIT IN SPECIAL PURPOSE FUND Section 610.11: DISTRIBUTION 609-0 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 or Motel: Hotel or Motel or similar establishment means any building or portion thereof containing six or more guest rooms intended or designed to be used, or which are used, rented, hired out to be occupied, or which are occupied for sleeping purposes by guests for a period of less than 30 continuous days. Subd. 2: Rooming House: Rooming House or similar establishment means any building or portion thereof containing not more than five guests rooms intended or designed to be used, or which are used, rented, hired out to be occupied, or which are occupied for sleeping purposes by guests for a period of less than 30 continuous days Subd. 3: 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 tax 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. 609-1 CHAPTER VI—GENERAL REGULATIONS 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 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: Operators 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 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. 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. 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: 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 609-2 CHAPTER VI—GENERAL REGULATIONS 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 Deficiency. 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 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 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 610.08: TAX DETERMINED 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 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 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 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 609-3 CHAPTER VI—GENERAL REGULATIONS 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. Section 610.09: ADMINISTRATION. The City Administrator shall have responsibility for enforcement and administration of this Ordinance. Section 610.10: 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 610.11: 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 This page intentionally left blank