HF150

Purpose

This bill is to clarify and expand how local governments in Minnesota can impose a local lodging tax. It sets the rules for when cities and towns can charge a lodging tax, how high the tax can be, and what types of charges it covers. It also specifies that the tax applies to short-term lodging purchases, including some related services, and it includes camping sites operated as municipal campgrounds.

Main Provisions

• Local governments (cities with statutory or home rule charters, and towns) may impose a local lodging tax of up to 3% on the gross receipts from lodging services.
• Eligible lodging types include hotels, motels, rooming houses, tourist courts, resorts, and camping site receipts for municipal campgrounds.
• The tax applies to the entire amount paid to obtain access to lodging, including ancillary or related services and services provided by an accommodations intermediary (as defined in another statute).
• Long-term stays are exempt: the tax does not apply to lodging if the stay is for a continuous period of 30 days or more.
• Implementation methods:
  • Cities: the tax is imposed by ordinance.
  • Towns: the tax is imposed by the affirmative vote of the electors at the annual town meeting or at a special town meeting.
• The provision uses a “notwithstanding” clause, meaning it can supersede other laws when establishing this local tax authority.
• The changes modify Minnesota Statutes 2024, section 469.190, subdivision 1.

Notable Changes to Law

• Explicitly authorizes up to 3% local lodging taxes for cities and towns, broadening local revenue authority for lodging.
• Extends tax coverage to camping site receipts at municipal campgrounds.
• Requires local approval (ordinance for cities; elector vote at town meetings for towns).
• Clarifies that the tax applies to the full consideration for lodging, including certain ancillary services and services from accommodations intermediaries.

Practical Implications

• Local governments gain clearer, formal authority to raise revenue through a lodging tax, which could fund local services or projects.
• Short-term travelers may face a tax on lodging costs, while people staying 30 days or longer would not be taxed under this provision.
• The tax could include fees or services mediated by intermediaries involved in providing lodging.

Relevant Terms - local lodging tax - gross receipts - lodging - hotel - motel - rooming house - tourist court - resort - camping site receipts - municipal campground - accommodations intermediary - ancillary services - related services - ordinance - affirmative vote - annual town meeting - special town meeting - statutory city - home rule charter city - not withstanding - Minnesota Statutes 2024 - section 469.190 - subdivision 1