UP officials call for short-term rental taxes to fund tourism management

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MARQUETTE, Mich. (WLUC) — Representatives from Marquette and Hancock this week petitioned the Commerce and Tourism Presidency for taxes on short-term rentals.

Rep. Sara Cambensy (D-Marquette) and Rep. Greg Markkanen (R-Hancock) sent a letter to Trade and Tourism President Pauline Wendzel urging her to take HB 5521 for a hearing. This legislation would allow Upper Peninsula counties to levy a 6% excise tax on short-term rentals.

Currently, only designated hotels are permitted to charge up to a 6% room assessment fee as part of their County Convention and Visitors Bureau. The bill, sponsored by Cambensy, came after UP counties experienced exponential growth in tourist numbers over the past 10 years and pressure on public safety, trails and local accommodations. by non-local residents. Alger County, which has Pictured Rocks National Lakeshore, and Keweenaw County have been particularly busy, seeing record numbers of visitors to their smaller communities.

While increased visitor spending is helpful for local businesses, it’s beginning to strain local taxpayer resources, which can leave public safety officials overstretched, Cambensy said.

“Tourism is a tremendous economic driver for our small businesses and restaurants. My bill does not take a penny away from the marketing and promotional activities that our Convention and Visitors Bureaus and the Pure Michigan Campaign help our UP communities through their hotel review fees,” Cambensy said. “My bill simply seeks to apply a similar tax on short-term rentals to help our local communities deal with increased visitor numbers.”

Local convention and visitor bureaus are permitted to use room assessment fees to pay for office operations and marketing and promoting tourism in Michigan. These room assessment fees cannot be used for government purposes and limit their ability to help our local communities manage tourists, pay for infrastructure, or invest in our trail system.

HB 5521 would allow local counties to ask their residents about the possibility of levying a 6% excise tax on short-term rentals, which local counties can use for the following purposes: 3% for public safety services and infrastructure, 1% for emergencies, upgrades or trail maintenance, 0.5% for Michigan State Police for additional highway patrol, 0.5% for additional MNR conservation officers and 1% for local housing needs. Since each county has unique differences when it comes to public safety services, each county should work with its cities, townships and villages to determine the language of the ballot on how the 3% revenue will be shared.

Likewise, each county will have the ability to create a track committee with representatives from motorized and non-motorized sports organizations to determine where that funding goes.

Currently, the 6% room assessment fee brings in nearly $8 million a year to UP’s convention and visitor bureaus. Cambensy expects the annual amount to be similar for short-term rentals in each county.

There is concurrent legislation that seeks to take the additional 6% currently not collected on short-term rentals and allow local convention and visitor bureaus (CVBs) statewide to collect it as room assessment fees, making them go towards more marketing and tourism promotion.

“I don’t think you’ll find many local residents who think we need to double down on our promotion and marketing of UP right now. From the feedback I’m getting, locals want to see tourism run better, their public safety services protected, a local housing fund created to help build more affordable houses or apartments that short-term rentals get out of market, and their trails maintained better to have more users on them,” Cambensy said.

Cambensy and Markkanen hope to get an audience on HB 5521 this spring. They are also working with Senator McBroom to see if the senators are willing to explore a regional approach to excise taxes on short-term rentals, allowing each region to use the 6% tax in a way that allows their residents better manage tourists in their regions. .

Below is a copy of the letter addressed to the Chair of Commerce and Tourism.

Below is the 2019 CVB revenue in UP

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