The Legislature having returned this week from a 10-day Easter/Passover/Spring Break has hit the ground running. Prior to the break, the House completed their work in the various finance committees. The House released their tax proposal and bills with tourism related funding and policy provisions. The Senate returned this week and released their tax proposal but also passed off the Senate Floor their budget bill containing funding for Explore Minnesota Tourism. Listed below are the status of the various proposals the Minnesota Association of Convention and Visitors Bureaus has been working on this session.
Local Lodging Taxes
The House and Senate both contain the following modifications to existing local lodging taxes. The House provisions are in House File 2125 which will pass off the House Floor late Thursday evening. The Senate provisions are included in Senate File 5 which will be on the Senate Floor the week of April 29th. We’ve identified where there are differences in the modifications.
- Minneapolis – HF 2125 eliminates the 13% cap on local taxes, the Senate raises the cap to 13.875% both bills allow the city the ability collect the local lodging taxes permitted under existing law. The Senate delays implementation to September 30, 2019
- St. Paul – Both the House and Senate allow the local lodging tax to be increased from 3-4%.
- Two Harbors – Adjusts the cap.
The House and Senate both provide for the creation of new local lodging taxes. The following provisions are included in both the House and Senate proposals. We’ve noted where there are differences in the House and Senate proposals.
- La Crescent Lodging Tax – Both the House and Senate Tax Bills allow for a new tax up to 5%. The House requires ½ of the tax be dedicated to the local chamber of commerce and ½ dedicated to the La Crescent Event Center to promote local tourism. The Senate bill requires the city to follow the existing law on how the funds can be used.
- Lake County Lodging Tax – Establishes a CVB via a 4% tax, 3% dedicated to supporting county marketing efforts and 1% dedicated to county events and festivals. This tax would be in addition to any tax imposed by a local unit of government. The provision would prohibit any new local unit of government from imposing a new local lodging tax.
House File 2125 also includes the Plymouth Local Lodging Tax, the Senate did not include this request in Senate File 5. The House Bill would allow the city of Plymouth to impose an extra 3% local lodging tax for five years. Two thirds of the revenue from this special tax must be used for capital improvements to public facilities and marketing and promotion. The balance of the funds must be used as required under existing law to fund a local convention or tourism bureau.
Additional Items of Concern: Labor Day School Start, Explore MN funding, Collection of Lodging Tax from OTAs
- On Tuesday, as part of a broad coalition, we were successful in deleting a provision from the House Omnibus Education Budget Bill which would have allowed school districts to start prior to Labor Day for the next two academic years. The House amendment received broad bipartisan support with a vote margin of 93-38.
- On Tuesday, the Senate passed the Omnibus Environment Finance Bill SF 2314. The bill provides funding for Explore Minnesota Tourism. Prior to the legislative break, the Senate modified the appropriation for Explore Minnesota Tourism to provide a $2 million placeholder in the Grants Program. This was accomplished by reducing the base budget but was necessary to keep the grants program alive for the remainder of the 2019 Session.
- The House included in their Omnibus Tax Bill the Minnesota Department of Revenues provisions related to accommodation intermediaries. The House Bill would require the local lodging tax to be imposed on the total consideration paid for ancillary services, including those provided by accommodations intermediaries. The provision also allows for an accommodations intermediary to remit the tax annually and makes clear the language does not intend to create a presumption regarding the definition of lodging prior to the date of enactment. The Senate Tax bill does not included these provisions.
The Legislature has three weeks remaining in the 2019 Legislative Session. All work must be completed by May 20th.
- Posted by MACVB
- On April 26, 2019
- 0 Comment