A compromise in hospitality tax debate?

Now that the Bemidji hospitality tax has cleared the state House floor, it’s almost certain to be brought up in conference committee negotiations between lawmakers from both chambers.

And while the Senate bill didn’t include the tax on hotel and restaurant purchases in its omnibus tax bill released Tuesday, there could be room for compromise on the bill.

One of the main reasons for that exclusion, according to Taxes Committee Chair Rod Skoe, DFL-Clearbrook, was the lack of active support from the local chamber of commerce. But he also said the bill would set precedent, because it uses taxes generated from lodging receipts for Sanford Center operations and not tourism marketing and promotion.

The city of Bemidji, like many other cities, has a 3 percent lodging tax that goes to the local tourism bureau to bring more people to the area. Other than a handful of cities that were grandfathered in when the law was passed, that’s the only thing the lodging tax revenues can fund, Skoe argues, and not event center operations.

That leaves the food and beverage tax portion of the bill. City manager John Chattin has said that 80 percent of the revenues from the hospitality tax would come from food and beverage sales

Mayor Rita Albrecht said yesterday she would personally still support the bill if the lodging tax was taken out, but Ward 4 Councilor Reed Olson, part-owner of the Wild Hare Bistro, has said he would not. It’s unclear where the rest of the council sits in that scenario.

In other words, stay tuned. Because the fate of the hospitality tax is far from certain this legislative session.

 

 

 

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