The Lake County Board of Commissioners revisited the implementation of a countywide 4% lodging tax at a Committee of the Whole meeting in Silver Creek on Tuesday, Oct. 15.
Since March, a committee with county commissioners, the county administrator and auditor, as well as advisers from each committee, have been meeting to discuss the possible implementation of a 4% lodging tax across the county.
Funds garnered from the proposed tax would be dedicated in two ways: 3% would go to funding countywide marketing campaigns, while 1% would go back directly to the communities to fund festivals and events.
Back in May, the county received legislative authorization to implement the countywide 4% lodging tax. However, the county board has not yet approved an ordinance to adopt the new tax.
Part of the reason for the delayed action is due to some questions the board had regarding how the tax would be applied. County Administrator Matt Huddleston spoke with the Minnesota Department of Revenue regarding some of these concerns.
Huddleston said the state would help the county draft the ordinance to ensure the language is appropriate and can be approved by the state.
"There aren’t a lot of counties that have a countywide lodging tax. So they want to work with us to create a model that really covers all the bases," Huddleston said. "So if they receive an ordinance with language that makes them uncomfortable, they could have a basic example to point to."
One of the questions the state answered regarded which types of entities qualified to be taxed.
"One of the important things I took away was, in respect to vacation rentals, they're included in the tax and we want to make sure our ordinance is correct in regards to them," Huddleston said. "They also confirmed that city and state campgrounds are all included under the lodging tax."
The board also discussed the issue of Fall Lake Township. Fall Lake and Stony River townships already collect a 3% lodging tax, which is then rolled into the Ely Area Tourism Bureau. With this in mind, the exploratory committee asked if the area could be excluded from the Lake County lodging tax.
However, Huddleston confirmed that due to the language of the legislation approved by the state, the tax would have to be applied to the entire county. Therefore, more discussions with members from Fall Lake Township are needed. Representatives from the tax committee are planning to visit the township board meetings in the future.
The county also has to hold a public information meeting and public hearing before the tax can be implemented. Huddleston said the earliest the tax could be implemented, due to the state's quarterly schedule, would be April 1. Therefore, the local ordinance would have to be approved before Jan. 1 to be applied by April.
The county hasn't confirmed the public meeting and hearing dates, but is expected to revisit the issue at the next county board meeting Oct. 22.