Local Option Lodging Taxes

MACVB - 2017 Position Statement

Position Statement: The Minnesota Association of Convention and Visitor Bureaus supports Minnesota Statutes 469.190. The Explore Minnesota Tourism Council also supports this statute.

Perspective:
The existing statute establishes a correlation between the lodging taxes collected from visitors to a community and tourism-based marketing/promotional initiatives.  This revenue generation system benefits those who are recipients of tariffs, as well as the broader community.  An important peripheral benefit is that these tax receipts reduce the burden on local tax payers.

Convention and Visitor Bureaus (CVB’s) and Destination Marketing Organizations (DMO’s), operating pursuant to this statute, are able, with utilization of lodging tax funds for marketing to make visitors aware of the local community and its assets. CVB’s/DMO’s regularly collaborate with Explore Minnesota Tourism (EMT) to further promote local communities and thus can access resources that would not otherwise be available.

Importantly, Convention and Visitors Bureaus complement the Economic Development function of a city, county, or township. This permits local jurisdictions to use the allocated dollars available to them in a far more targeted manner. CVB’s provide an exceedingly valuable resource as they work together with Economic Development factions to spread the word about the advantages of visiting the community – for business or other reasons.

Economic Impact: A recent report* prepared for the Minnesota Office of Tourism to assess the economic impact of advertising by that department found that for 2016 – every $1 invested in the Minnesota Ad Campaign generated $98 in visitor spending and $9 tax revenue benefit to Minnesota residents. A second study**reviewing the economic impact of the Spring/Summer 2016 Tourism Ad Campaign in Minnesota found that:

  • The Spring/Summer 2016 Minnesota ad campaign generated 3.5 million trips to Minnesota, resulting in $389 million in additional traveler spending.
  • Including indirect and induced impacts, this ad campaign promoting Minnesota generated $51.9 million in state and local taxes and $47.6 million in Federal taxes.
  • Travel-driven state and local tax proceeds of $51.9 million helped offset the average household tax burden by $24 per household. That is, were it not for the 2016 tourism ad campaign, Minnesota households would need to pay $24 each to maintain the same level of government revenue.

The local lodging tax allows communities across Minnesota to be a part of this impactful economic picture.

*Longwood International – Minnesota 2016 Tourism Advertising Evaluation Study
**Tourism Economics – The Economic Impact of the Spring/Summer 2016 Tourism Ad Campaign in Minnesota