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REPORT
TO: Board of Commissioners
FROM: James Joerke
DATE: September 14, 2021
SUBJECT: Endorse Visit Cook County's Request for State Legislative Approval to Renew the 1% Lodging Tax
DESCRIPTION: Endorse Visit Cook County's Request for State Legislative Approval to Renew the 1% Lodging Tax RECOMMENDATION: Endorse Visit Cook County's Request for State Legislative Approval to Renew the 1% Lodging Tax SUMMARY: The 1% lodging tax that is specific to Cook County was obtained through special legislation in 2008 and is set to expire in November 2023. Commonly referred to as the “1% events tax,” it is used by Visit Cook County (VCC) to support the marketing and production of events and programming within Cook County. The County Board's endorsement of the 1% lodging tax will strengthen VCC's bid to obtain state legislative support for renewal of the tax. Additional information is available in the attachments. PURPOSE: Support activities that promote Cook County as a tourist destination. FINANCIAL IMPLICATIONS: The Board's endorsement of VCC's bid to renew the 1% lodging tax will have no direct impact on the County levy. CONCLUSION: The administrator recommends that the Board endorse Visit Cook County's request for state legislative approval to renew the 1% lodging tax.
Visit Cook County 1% CCEVB Renewal
Presented to the Cook County board of CommissionersJune 2021
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Visit Cook County is seeking renewal of the 1% County Lodging Tax!
Three Step Renewal Process:
1. Seek endorsement from the Cook County Commissioners in renewal of this tax. 2. Bring endorsement to state legislature. 3. After state approval, bring renewed statute back to Cook County Commissioners for enactment.
Presenting on step one Today: Linda Jurek - Executive Director
Lily Nelson-Pedersen - Financial & Administrative Manager
Introduction | Why are we here?
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Introduction | Goals
Goals of today’s presentation:
● Outline who Visit Cook County is as an organization including leadership, history and a timeline.
● Discuss use of lodging tax and provide foundational information on both the 1% county tax and 3% state lodging tax.
● Gain endorsement from the Cook County Commissioners to seek renewal of the 1% lodging tax.
LeadershipVCC Board, Association Members, & Team
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Cook County is a diverse geographical area with our inland lakes, Lake Superior shoreline, BWCAW, international border and Boreal forest. The
organizational structure of Visit Cook County, with our board of directors and tourism associations, mirrors this diversity. Our organizational model
is not replicated anywhere else across the State of Minnesota. The unique perspectives and diversity in our leadership are a key factor in our
success. While our association and board members must share similar values in relationship to tourism as a whole, the support of the the mission
and vision of Visit Cook County remains at the core of our organizational structure.
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“Recognize that diversity brings richness. Diversity brings new ideas.
Diversity brings growth. Diversity brings dynamism. Diversity brings
energy. And, lack of diversity means sameness, dullness, lack of growth.”
-Destination International
VCC Board of Directors Responsibilities:● Determining strategic goals and direction● Enhancing the organization’s public image● Determining goals through an approved strategic plan● Assuring effective organizational and financial planning● Electing officers in accordance with the by-laws
VCC Board & Association Member Responsibilities:● Attending meetings of the board of directors and/or
association meetings● Supporting and promoting the mission and vision of VCC● Embracing sound, ethical, and dedicated decisions that
support the mission and vision of the organization
Leadership | Visit Cook County Team Past & Present
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Visit Cook County Administrative & Information Center Team - Visit Cook County retains and employs a professional staff to carry out the
initiatives and directives of the board and associations.
The following are lists of current employees, past employees, their tenure and positions.
Visit Cook County Administrative Team - Current Past Employees & Tenure
Linda Jurek, Executive Director (2013 - present) Tom Borgman, Marketing Director (2011 - 2012)
Kjersti Vick, Marketing & Public Relations Director (2014 - present) Shelby Gonzales, Marketing Manager (2012 - 2014)
Lily Nelson-Pedersen, Financial & Administrative Manager (2018 - present) Sally Nankivell, Executive Director (2010 - 2013)*
Carah Thomas Maskell, Information Center Coordinator (2018 - present) Anna Klobuchar (2012 - 2019)
Carolyn Higgins, Information Center (2005 - present)* Alicia Kangas (2010 - 2018)*
Chris Powell, Information Center (2019 - present) Bill Wehseler (2010 - 2020)*
Dan Helmerson (2011 - present) Molly O’Neill (2016 - 2020)
Aaron Carlson, Information Center (2019 - present) Suzanne Weber (2010 - 2017)*
Diane Lesman (2010 - 2011)*
Judy Boots (2007 - 2019)*
Katie Krantz (2016 - 2018)
Mandy Theiner (2008 - 2015)*
Maggie Barnard, Communications Manager (2009 - 2021)*
*employed by tourism associations prior to 2010 merger and creation of Visit Cook County
Leadership | Board Members of Visit Cook County Past & Present
Visit Cook County Board of Directors - The board for Visit Cook County consists of leadership from each of the tourism associations.
Visit Cook County Board of Directors - Current Past Board Service
Jennifer Kennedy, Chair (GMATA) Nancy Burns (LTTA)
Charles Skinner, Vice Chair (LMC) Mike Prom (GTA)
John Fredrickson, Treasurer (GTA) Zach Baumann (GTA)
Katie Krantz, (LTTA) Dave Seaton (GTA)
Dave Tersteeg (GMATA) Adam VanTassel (GTA)
Eric Humphrey (GMATA) Bob McCloughan (GTA)
Jim Vick (LMC) Dave Seaton (GTA)
Bryce Campbell (LTTA) Amber Pratt (GMATA)
Thom McAleer (LTTA) Bill Hansen (LTTA)
Emily Haussner (LTTA) Bob Ryan (LTTA)
Clair Nalezny (LTTA) Eric Humphrey (GMATA)
Carl Madsen (GTA) Stephanie Slanga (GMATA)
Beth Kennedy (GMATA)
Dennis Rysdahl (LTTA)
Mike Larson (LTTA)
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Leadership | Tourism Associations
Gunflint Trail Association
GTA Board of Directors
John Fredrickson, President
Carl Madsen, Vice President
Open Seat, Sec./Treasurer
Deb Mark, At Large
Nancy Waver, At Large
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Lutsen Tofte Tourism Association
LTTA Board of Directors
Bryce Campbell, Lutsen Resort, President
Jim Vick, Eagle Ridge, Vice President
Dennis Rysdahl, AmericInn, Sec./Treasurer
Clair Nalezny, CVR
Emily Haussner, Caribou Highlands
Katie Krantz, Bluefin Bay
Thom McAleer, Cascade Lodge
Kim Corliss, North Shore Winery
Charles Skinner, Lutsen Mountains
Grand Marais Area Tourism Association
GMATA Board of Directors
Jennifer Kennedy, Chair, Lodging
Representative
Sara Hingos, Vice Chair, Dining Representative
Chris Mehlhaff, Lodging Representative
Tom Nelson, Lodging Representative
Dave Tersteeg, Lodging Representative
Eric Humphrey, Retail Representative
Rachelle Christianson, Lodging Representative
Leadership Choice by Association - Each of the three tourism associations elect members to their BoD based on different criteria. GTA is an open call to all members, GMATA reserves spots specifically for dining and retail membership, and LTTA has guidelines for core leadership representation based on level of lodging tax collections followed by an open call to nominated business leaders from dining and retail.
TimelineThe Evolution of Visit Cook County
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Mission & Vision
Original Mission and Vision Statement - adopted March 2010
March 2010 - Mission Statement
The mission of the Cook County Visitors Bureau is to strengthen, promote and represent the tourism organizations in Cook County in order to
help them better meet the diverse needs of visitors to the county. To do this, the Cook County Visitors Bureau provides the County's tourism
organizations with the information, tools and resources they need to succeed, including education and training, networking, advocacy, and
group buying programs.
March 2010 - Vision Statement
The Cook County Visitors Bureau envisions a future in which the Cook County Visitors Bureau is a key partner in providing solutions that
address the tourism and visitor related issues facing the region.
Update to Mission & Vision Statement - adopted September 2018
In 2018, A group of board members (D. Tersteeg, N. Burns, D. Seaton, E. Haussner) volunteered to revisit and provide input on edits to
the statements. 10
Mission StatementThe mission of Visit Cook County is to enhance and grow a sustainable tourism economy in Cook County, MN.
Vision StatementVisit Cook County provides solutions to tourism and visitor related interests of the region.
1936 1991 1998 2000 2008 2008 2010
GTAThe Gunflint Trail Association
was loosely established in
1936. The members hosted a
75 year anniversary
celebration in October 2011.
In 1993, the Gunflint Trail
Association regrouped and
lodging tax district was
established.
LTTA
Lutsen Tofte Tourism
Association was incorporated.
CVB
The Convention & Visitors Bureau
(CVB) was formed by the Grand
Marais Chamber of Commerce as an
arm of the Chamber.
GMATA
GMATA was incorporated and the lodging
tax district was established. 2001-2009
GMATA exists separate from the Chamber
of Commerce. Grand Marais lodging tax
district supports tourism outreach and
marketing. Four directors were hired over
the course of eight years.
CCEVBCook County Events &
Visitors Bureau established.
1% Lodging taxCook County campaigns for
and succeeds in gaining
approval from the State to
start collecting an additional
1% county tax for the
purpose of funding the
CCEVB.
VCCAll county tourism associations come
together under one organization and Visit
Cook County is established. All county-
wide collected lodging tax is combined for achievement of greater marketing efforts.
Foundational Years
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Organizational roots
1936 - Gunflint Trail Association Established
1991 - Lutsen Tofte Tourism Association Established1991 Certificate of Incorporation issued 12/16/1991 - Lutsen Tofte Schroeder Recreation Management Corporation incorporated. Lodging tax resolution at 3% recorded March 22, 1993.
1998 - Convention & Visitor Bureau of Grand Marais Established
2008 - Cook County Events & Visitors Bureau Established
2010 - Visit Cook County
In 1993, the Gunflint Trail Association regrouped and a lodging tax district was established.The members hosted a 75 year anniversary celebration in
October 2011. Lodging tax resolution at 3% recorded August 21, 1992.
The Convention & Visitors Bureau (CVB) was formed by the Grand Marais Chamber of Commerce as an arm of the Chamber.
Chamber board members chose which board they wanted to serve on and one director was employed to manage both operations.
2000 - Grand Marais Area Tourism Association EstablishedGMATA was incorporated and the lodging tax district was established. 2001-2009 GMATA exists separate from the Chamber of Commerce and the lodging
tax from the Grand Marais lodging tax district supports tourism outreach and marketing. Four directors were hired over the course of eight years. From a
2005 GMATA strategic planning session it is recorded that “There will be a greater number and variety of things for people to see and do in Grand Marais
including creating a four season destination, utilization of the harbor, bike racks throughout town, small downtown indoor venue for the performing arts,
etc.” Lodging tax resolution at 3% recorded October 1, 2000.
Cook County Visitors Bureau (Visit Cook County) approved in March 2010 with first joint collection of lodging tax beginning on May 1, 2010
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Lodging Tax
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Lodging Tax Revenue
Non-Lodging Tax Revenue
1% Collections
3% Collections
Partner Contributions
Sales
Lutsen Mountains
Grand Portage**Paused in 2021 due to Covid
Website
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Lodging Tax | visit cook county income sources
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Lodging Tax is referred to in many ways across the US. In some regions, lodging tax may also be known by stay tax, occupancy tax, room tax, sales tax, tourist tax, or hotel tax. Lodging tax, as we refer to the tax universally across the State of Minnesota, is protected by many advocacy organizations throughout the state including Explore Minnesota, Hospitality Minnesota, and MN Area of Conventions and Visitors Bureau. In Minnesota, Local Lodging Tax collection is guided the Minnesota Statute 469.190.
The statute in its entirety can be found here: https://www.revisor.mn.gov/statutes/cite/469.190
Minnesota Statutes 469.190 - Local Lodging Tax - Authorization SummaryA statutory or home rule charter city may by ordinance, and a town may by the affirmative vote of the electors at the annual town meeting, or at a special town meeting, impose a tax of up to three percent on the gross receipts from the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it for a continuous period of 30 days or more. A statutory or home rule charter city may by ordinance impose the tax authorized under this subdivision on the camping site receipts of a municipal campground.
Disposition of Proceeds: Ninety-five percent of the gross proceeds from any tax shall be used by the statutory or home rule charter city or town to fund a local convention or tourism bureau for the purpose of marketing and promoting the city or town as a tourist or convention center. This subdivision shall not apply to any statutory or home rule charter city or town that has a lodging tax authorized by special law.
There are over 100 cities and/or towns currently collecting lodging tax throughout Minnesota. There are also 22 “cities” collecting lodging tax under
charter or special law which means there has been approval to deviate from the expected use of lodging tax. This list includes: Minneapolis,
Bloomington, Duluth, Rochester, St. Paul, Brooklyn Center, Tofte/Lutsen/Schroeder*, Winona, Roseville, Two Harbors, St. Cloud/Sartell/Sauk
Rapids/St. Joseph/Waite Park, Newport, Itasca County, Hubbard County, Proctor, Giant’s Ridge Rec Area (Biwabik), Marshall, Sleepy Eye, La Crescent,
Lake County, and Plymouth.
*Tofte/Lutsen/Schroeder special tax use allowed for Superior National Golf Course
Lodging Tax | Statewide
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Lodging Tax | Cook County, MN
3% Lodging Tax
The tourism association in Cook County adopted the collection of state lodging at varying times. Research of historical data revealed the following:
LTTA - 3% Lodging Tax Expansion Resolution adopted March 22, 1993GTA - 3% Lodging Tax Resolution adopted August 21, 1992GMATA - 3% Lodging Tax Resolution adopted October 1, 2000
1% Lodging Tax
Support for approval of collection was received from each of the townships and the tourism associations for the “purpose of increasing tourism and benefiting the economy of Cook County.” CCEVB was incorporated on July 20, 2007 and was initially funded with a 1% fee on lodging sales and a 3% fee on recreational sales by tourism businesses from the LTTA and GMATA regions with voluntary contributions from the GTA and the Grand Portage Tribal Council.
Ordinance Approved by Cook County Commissioners - 1% Lodging Tax Resolution No. 2008-54, November 2008
Adoption of the ordinance solidified the 1% collection of lodging tax to support CCEVB (events and marketing). GMATA, GTA, and LTTA did not support the 3% recreational tax; LMC supported the 3% recreational tax.
The 1% CCEVB, coupled with website sales and partner contributions, allows for more flexible budget expenditures outside the allowed use of the 3%. VCC works with each tourism association annually in the allocation of the funds from the 1%. This allows Visit Cook County to develop (produce), sponsor, and promote events and tourism initiatives in the area that align with the VCC mission and vision.
Lodging tax | cook County CCEVB 1%
Cook County Events & Visitors Bureau (1% Lodging Tax Resolution)
The resolution included support from GMATA, LTTA, and GTA authorizing up to a 1% additional lodging tax and a 3% recreation tax to fund a new Cook
County Event and Visitors Bureau for the purpose of increasing tourism visits during low tourism periods for the benefit of the economy and residents of
Cook County. Incorporated on July 20, 2007 pending passage of State legislation. The State legislature approved the provisions in May 2008.
Effective Statute date: June 20, 2008 with tax collection beginning December 12, 2008 with the tax “continued for an initial period of five (5) years and
thereafter for successive five year periods in the absence of a vote prior to the end of the fourth (4th) year. The State legislature approved this collection
with termination 15 years after imposition.
From the Article of Incorporation of Cook County Events and Visitor Bureau:
This corporation is organized and shall be operated exclusively as a Business League for the purpose of planning, marketing, organizing, funding,
promoting, supporting and hosting entertainment events and performances, conferences, education and training sessions, recreational activities,
festivals and other events, with a focus on events during the low tourism time periods, to achieve a net increase in the number of visitors to Cook
County and promote a sustainable year-around tourism economy in Cook County and improved year-around employment and economic well-being
for the residents of Cook County.
Management Company Agreement - Cook County Visitors Bureau (VCC)
Document signed on March 8, 2010 combined lodging tax beginning May 1, 2010. Original document signed by: Bob McCloughan - GTA, Mark Sandbo -GMATA, Mike Larson - LTTA, Charles Skinner - Lutsen Mountains Corp., Frank Vecchio - Grand Portage, Charles Skinner - CCEVB
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Lodging Tax | superior national golf & VCC
Owned by the Cook County Economic Development Authority (EDA) Superior National Golf (SNG) Course is a 27-hole, gold star, community asset in Lutsen, Minnesota.
Cook County & the EDA Bond Agreement
Although operated and run for many years prior to this date, in 2014 an agreement was made between Cook County, Minnesota, and the EDA to fund a major expansion project and make improvements to the existing course. Cook County issued $2,410,000 in General Tax Abatement Bonds to the EDA to complete the project.
Bond repayments were scheduled to begin in 2016 (as outlined in the loan agreement) from SNG’s gross revenues. However, as was also outlined, if gross revenues were not sufficient to cover the bonds, lodging tax collected in the LTTA district would be retained by Cook County as payment. Thus, starting in 2016 thru current, this collected lodging tax has been the sole source of payments on the SNG bonds.
The use of lodging tax in a project of this kind had to be approved by the state in special legislation. Collecting lodging tax under charter or special law indicates there has been approval to deviate from the expected use of lodging tax. Without special legislative approval, Statute 461.190, does not extend the use of lodging tax for capital improvement projects.
Visit Cook County, EDA, & SNG Marketing Agreement
Visit Cook County is tasked first and foremost as a marketing organization. Parallel to the use of lodging tax as a source to pay the SNG bonds in lieu of gross revenues, an official marketing agreement between the SNG, the EDA, and VCC was established in August 2013 and extends through 2022.
This agreement establishes an annual monetary VCC contribution of $50,000 and an EDA contribution of $20,000 for SNG to use toward marketing. This marketing agreement sunsets in 2022.
In taking an average of the last 7 fiscal years, the combination of the bond payments and the marketing contribution to SNG accounts for 8% of all of VCC’s expenditures annually.
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Lodging Tax | Impact of the 1%
➔ Visit Cook County has invested of over $10 million in event expenditures since 2013.
➔ Shoulder season growth has been demonstrated and recorded as having a direct correlation to events.
➔ Events help to solidify and enhance community brands and create a cultural identity.(i.e. Cook County is a dog sledding destination, the county supports an active arts community through Art Festival and both of the Art Along the Lake Events, etc.)
➔ As a halo effect, events introduce area assets to visitors. (i.e. Bikers are introduced to new trails, or new times of year to recreate)
➔ Event expenditures have a more flexible allowable use of lodging tax.
Lodging Tax | Shoulder Season Growth
June LTTA lodging tax collections have grown by 156% since 2011 largely attributed to the success and growth of
the Lutsen 99er.
November countywide lodging tax collections have
grown by 39% since 2011 corresponding to
VCC’s Storm Festival and Storm Season marketing
campaigns.
Combined April & May countrywide lodging tax
collections have grown by 93% since 2011.
This can be traced back to the hugely successful
and widely embraced branding of Waterfall Season
as well as many smaller events in this time period
(Spring Gallery Tour and Le Grand du Nord.)
April & May
NovemberJune
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Lodging tax | 1% - Supported Uses by association
GTA: Gunflint Mail RunBiggest Blueberry ContestDog Days of WinterSnowmobile Drag Race SeriesTrout DerbyGunflint Canoe RacesBWCA ExpoWet Your Paddle ProgramGTA InstagramChik Wauk Support
LTTA: Lutsen 99erLMC Concert SeriesLight Up LutsenHopped Up CaribouTofte 4th of JulyNorpine Fat Bike RaceSuperior Trail RacesCandlelight Ski & SnowshoeMusic Reimbursement Program Norpine & Sugarbush Trail SupportOnion River Road Plowing
GMATA: Moose MadnessWTIP Radio WavesNHFS Events (Unplugged, Wooden Boat Show, etc.)GMAC Art FestivalFisherman’s PicnicVoyage North 5&10KPincushion Family FestivalGrand Marais Block PartyLe Grand du Nord Oh Ole Night Dark Sky Festival Music Reimbursement ProgramMini Grant Program4th of July Music & FireworksGM Walking Map
County-Wide/Other:Rendezvous Days (GP)Storm FestivalHygge FestivalDark Sky CaravanUSFS Naturalist ProgramEvent NewsletterSpring Gallery TourFall Studio TourBeargreasePlein Air
Marquee events bring an estimated 37,500 visitors to Cook County annually
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Questions?
Mission: The mission of Visit Cook County is to enhance and grow a sustainable tourism economy in Cook County, MN.
Vision: Visit Cook County provides solutions to tourism and visitor related interests of the region.
FAQ Lodging Tax and Visit Cook County Q: What is Visit Cook County (VCC)? A: Visit Cook County is a Destination Marketing Organization (DMO) that represents the tourism tax jurisdiction of the Lutsen-Tofte Tourism Association (LTTA), Grand Marais Area Tourism Association (GMATA), Gunflint Trail Association (GTA) and voluntary contributing partners of Grand Portage and Lutsen Mountains. Learn more about Visit Cook County and the tourism associations in the VCC Guidebook. Q: What is a Destination Marketing Organization (DMO)? A: Destination Marketing Organizations (DMO) or convention and visitors bureau (CVB) is a not-for-profit that promotes and markets local attractions, accommodations, tourism services, and events. The primary objective is to attract and inform visitors about a destination to support the local economy. DMOs are typically funded through lodging tax, membership dues, improvement districts and other resources. Q: How is Visit Cook County funded? A: Visit Cook County is funded by lodging tax (both a 3% and 1%) that is paid by visitors through overnight lodging accommodations. Additional non-lodging tax sources contribute to the overall budget such as grants, partner contributions and website sales. Q: What is lodging tax? A: Lodging tax is referred to in many ways across the US. In some regions, lodging tax may also be known as stay tax, bed tax, occupancy tax, room tax, sales tax, tourist tax, or hotel tax. It is a tax that is paid by the visitor and collected by lodging entities. Q: What is the difference between 3% lodging tax and 1% lodging tax? A: Per Minnesota state statute, a maximum of 3% lodging tax may be imposed by jurisdiction. 95% of collections must be spent on the marketing and promotion of the city/town or convention center. (Source: Minnesota State Statutes 469.190 Lodging Tax.) The additional 1% lodging tax is specific to Cook County and was obtained through special legislation in 2008. Commonly referred to as the “1% events tax,” its usage is more broad in scope to support the marketing and production of events and programming within Cook County. Only the 1% lodging tax is up for renewal per the special legislation. Q: Is Visit Cook County associated with the local or state government? A: No, it is not a branch of the city, county or state government. Visit Cook County is an independent 501(c)6 nonprofit organization. A 501(c)6 is defined as an association of persons having some common business interest, the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit. Q: Does the county or city government receive a portion of lodging tax revenue? A: Yes, the county reserves 1.5% of total lodging tax collections to cover administrative costs. By Minnesota state statute, a maximum of 5% can be retained by a county entity to cover processing.
Mission: The mission of Visit Cook County is to enhance and grow a sustainable tourism economy in Cook County, MN.
Vision: Visit Cook County provides solutions to tourism and visitor related interests of the region.
Q: How are the VCC budget allocations determined? A: Visit Cook County is led by three tourism associations who all contribute members to the main Board of Directors. Each tourism association dictates how money is allocated out of the 1% collected bed tax in their lodging district. The 3% budget is overseen and guided by the main Board of Directors with thoughtful input and suggestions from staff, marketing partners, and current tourism trends and opportunities. Q: What is the process for renewing the additional 1% lodging events tax? A: The 1% lodging tax is set to expire in November 2023 if not renewed. The process to renew began in January 2021 during the annual VCC board retreat in which the board voted unanimously to approve the pursuit of renewal. The next step is to seek the support of the Cook County Board of Commissioners, community and stakeholders. Then VCC works closely with the Cook County Chamber of Commerce and key stakeholders to present to elected state officials, Senator Tom Bakk and Representative Rob Eklund, who will bring it to the legislature. Q: Why is Visit Cook County starting the renewal process in 2021 if it is still 2 years away from expiring? A: It takes several months to a year working with the legislature to gain approval. If Cook County is not successful in renewing, it will take an additional year to make the budgetary reductions to the VCC budget. Q: What happens if the 1% lodging tax is not renewed? A: If Cook County is unable to renew the 1%, then the special legislation will expire in November 2023. This loss of funding would be immediately felt county-wide; from the non-profits that organize favorite community events to local musicians and artists that are supported directly through reimbursement programs. If not endorsed, a significant portion of our community’s investment in our number one industry would be eliminated. Q: Why can’t lodging tax be used for housing or other local programs? A: Visit Cook County understands and recognizes the housing issues and is working closely with the Chamber, EDA, city and county government and private businesses to support finding sustainable solutions to the long-term housing needs of our communities. However, there are several reasons why lodging tax is protected by Minnesota state statute. Lodging tax was established with the sole purpose of building and sustaining a tourism economy. Per the state statute, 95% of lodging tax collections must be used to market and promote a destination or its attractions. The additional 1% lodging events tax, unique to Cook County, has a more broad use allowance. It is protected and restricted to promotion, marketing and production of events and attractions within a destination. Q: We’re busy. Why do we need lodging tax? A: Since 2010, the mission of Visit Cook County has been to “enhance and grow a sustainable tourism economy.” VCC has been working to achieve this by strengthening the shoulder seasons with the goal of stabilizing the tourism economy throughout the year. Tourism has seen rapid growth, especially in the past year and a half. Visit Cook County recognizes this and has pivoted outward marketing efforts away from new visitor attraction to informational promotion. Focusing more
Mission: The mission of Visit Cook County is to enhance and grow a sustainable tourism economy in Cook County, MN.
Vision: Visit Cook County provides solutions to tourism and visitor related interests of the region.
on educating the current visitor on proper Leave No Trace etiquette, COVID-19 stay safe messaging, wayfinding, and finding local resources. While the area is currently experiencing growth, it is important to note that stakeholders and national experts are expecting to see normal traffic patterns resume in the non-peak season (i.e. November - April.) Q: What would happen if all lodging tax collection was discontinued? A: The impact would be devastating to our community. While hard to quantify the exact impact to our community without a formal study, other destinations have cut funding and immediately saw a decline in visitation and brand awareness. In 1993, Colorado became the first state to eliminate its tourism marketing funding which resulted in annual revenue loss of over $2 billion a year and took until 2015, even though funding was reinstated in 2000, to fully recover market share. Q: How does tourism impact the overall quality of life in Cook County? A: Tourism impacts the local community in many ways. Across the nation, rural communities are losing their healthcare services, local grocery stores are unable to sustain business and recreational amenities are closing as the population in rural areas decline. In Cook County, we have a strong healthcare system, six grocery stores and recreational businesses like Lutsen Mountains or North House Folk School, that continue to grow and expand. The 2019 sales tax report shows that of the 8 counties in Northeast Minnesota, Cook County ranks #3 in leisure and hospitality Sales Tax collections and is nearly double the amount that is collected in neighboring Lake County. Sales tax is only one of many metrics that can be used to demonstrate the importance of tourism dollars in our local economy. Many amenities enjoyed by residents are sustained by tourism dollars. From the influx of sales tax and property tax dollars into the County budget (i.e. public health and human services, law enforcement, and road maintenance), to how Visit Cook County uses lodging tax to invest in the community, to attractive dining options and live entertainment, “living like a local” would look very different if tourism was not our main industry. Q: Is the 1% Lodging Tax different from the 1% Sales Tax? A: Yes! Though enacted around the same time in our county, the local 1% sales tax was special legislation to support specific projects. Some of the projects include the Cook County YMCA, county-wide broadband (True North), improvements to Superior National Golf Course, the renovation of the Grand Marais Public Library, improvements to Birch Grove Community School and others. The 1% sales tax sunsets when $20,000,000 has been collected. The 1% lodging tax is collected from visitors on overnight stays in lodging in Cook County, Minnesota. Visit Cook County is seeking renewal of the 1% lodging tax because this tax is slated to sunset in November 2023 without renewal. See above for more information on 1% lodging tax above. Saved: T:\Data\1 % Events\1% Tax Renewal 2023 | Last modified: 8/13/2021
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RESOLUTION NO. 2008-54
1% LODGING TAX RESOLUTION
COOK COUNTY EVENT & VISITORS’ BUREAU
WHEREAS, on February 27, 2007, following resolutions of support by the Grand Marais Area Tourism Association (“GMATA”), Gunflint Tourism Association (“GTA”), and Lutsen-Tofte Tourism Association (“LTTA”), the Cook County Board of Commissioners approved Resolution No. 2007-24 recommending that the State legislature authorize up to a 1% additional lodging tax and a 3% recreation tax to fund a new Cook County Event and Visitors Bureau for the purpose increasing tourism visits during low tourism periods for the benefit of the economy and residents of Cook County;
WHEREAS, the State legislature in June 2007 passed an Omnibus Tax Bill that included authorization for the lodging and recreation taxes recommended by Board Resolution No. 2007-24, but such omnibus tax bill was not signed into law by the governor;
WHEREAS, pursuant to County Board Resolution No. 2007-24, a new Cook County Event & Visitors Bureau (“Events Bureau”) was incorporated on July 20, 2007 and, pending passage of State legislation authorizing the taxes recommended by Board Resolution 2007-27, was funded with a 1% fee on lodging sales and a 3% fee on recreational sales by tourism businesses from the LTTA and GMATA regions and voluntary contributions from the GTA and the Grand Portage Tribal Council;
WHEREAS, the State legislature in May 2008 approved provisions that were signed into law (Laws 2008, Chapter 366, Article 7, Section 17) authorizing the Cook County Board of Commissioners to impose, by ordinance, up to a 1% lodging taxing and a 3% recreation tax to fund said new Events Bureau;
WHEREAS, in August 2008, GMATA, GTA, and LTTA voted to request that the County Board impose a 1% lodging tax to fund the Events Bureau, with the understanding that, as set forth in Board Resolution No. 2007-24, such tax shall “continue for an initial period of five (5) years and thereafter for successive five (5) year periods in the absence of a vote prior to the end of the fourth (4th) year by any of the three partner tourism associations to not support the continuation of such additional tourism taxes”;
WHEREAS, GMATA, GTA, and LTTA are not requesting the County Board to impose, at this time, a recreational tax as authorized by Laws 2008, Chapter 366, Article 7, Section 17, because of a shared concern that some recreational businesses might not support such a tax at this time and also because a large portion of the potential recreation tax is already being collected as a fee on alpine ski recreational sales and contributed to the Events Bureau and that additional revenue for the Events Bureau
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may be able to be collected through similar fees on the sales of other recreational businesses such outfitters and golf courses;
WHEREAS, the imposition of a 1% lodging tax will provide a stable and long term source for the lodging portion of funding for the Events Bureau and that when combined with additional voluntary contributions by recreational businesses, the Grand Portage Tribal Council and grants will provide the Events Bureau with sufficient funds to accomplish the purpose of the Events Bureau envisioned by Board Resolution No. 2007-24; and
WHEREAS, the Cook County Board of Commissioners has provided the notices and conducted the hearings required under Minnesota Law for the enactment of this ordinance.
NOW, THEREFORE, BE IT HEREBY RESOLVED AS FOLLOWS:
1. DEFINITIONS.For the purpose of this ordinance, the following terms, phrases and words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number and words in the singular number include the plural number. The word “shall” is always mandatory and not merely directory.
a) “Auditor-Treasurer” means the Auditor-Treasurer of Cook County, Minnesota or his or her designee.
b) “County” means the County of Cook, State of Minnesota. c) “Tribal Lands” means all land in Cook County, Minnesota that is owned
by the Grand Portage Reservation Tribe and over which the Grand Portage Tribe or any of its governmental units has tribal sovereignty.
d) “Lodging” means the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court or resort within Cook County other than on Tribal Lands, except where such lodging shall be for a continuous period of 30 days or more to the same lodger(s).
e) “Tax Administrator” means the Auditor-Treasurer or other official or entity with which the County has contracted to collect the tax on its behalf and for administrative services.
f) “Operator” means a person who provides lodging to others or any officer, agent or employee of such person.
g) “Person” means any municipality, individual, corporation, partnership, association, estate, receiver, trustee, executor, administrator, assignee, syndicate or any other combination of individuals. Whenever “person” is used in any provision of this ordinance prescribing and imposing a penalty, as applied to a corporation, association or partnership shall mean the officers or partners thereof as the case may be.
h) “Rent” means the total consideration valued in money charged for lodging whether paid in money or otherwise, but shall not include any
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charges for services rendered in connection with furnishing lodging other than the room charge itself.
i) “Lodger” means the person obtaining lodging from an operator. j) “Tax” as used herein means the tax imposed by this ordinance.
2. IMPOSITION OF TAX AND TERM. Pursuant to Laws 2008, Chapter 366, Article 7, Section 17, there is hereby imposed a tax of 1% on the rent charged by an operator for providing lodging to any person within Cook County other than on Tribal Lands. The tax shall be effective and commence December 1, 2008 and shall continue to be imposed by this ordinance for an initial period of five (5) years through November 30, 2013 and thereafter for successive five year periods (subject to the maximum period permitted by Laws 2008, Chapter 366, Article 7, Section 17, as hereafter amended) any one of the three partner tourism associations (GMATA, LTTA, or GTA) votes to recommend discontinuance of the taxes imposed by this ordinance prior to the end of the fourth year of any such five year period. The tax collected by the operator shall be a debt owed by the operator to the County and shall be extinguished only by payment to the County. In no case shall the tax imposed by this section upon an operator exceed the amount of tax that the operator is authorized and required by this ordinance to collect from a lodger.
3. COLLECTIONS. Each operator shall collect the tax imposed by this ordinance at the time the rent is paid. The tax collections shall be deemed to be held in trust by the operator for the County. The amount of tax shall be separately stated from the rent charged for the lodging and those persons paying the tax shall receive a receipt of payment from the operator.
4. EXCEPTIONS. No tax shall be imposed on rent for lodging paid by any officer or employee of a foreign government who is exempt by reason of express provisions of federal law or international treaty.
5. EXEMPTIONS. An exemption shall be granted to any person as to whom or whose occupancy it is beyond the power of the County to tax. No exemption shall be granted except upon a claim therefore made at the time the rent is collected and such a claim shall be made in writing and under penalty of perjury on forms provided by the County. All such claims shall be forwarded to the County when the returns and collections are submitted as required by this ordinance.
6. ADVERTISING NO TAX. It shall be unlawful for any operator to advertise or hold out or state to the public or any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent or that, if added, it or any part thereof will be refunded. In computing the tax to be collected, amounts of tax less than one cent shall be considered an additional cent.
7. PAYMENT AND RETURNS. The operator shall pay the taxes imposed by this Resolution to the Tax Administrator monthly not later than 25 days after the end of the month in which the taxes were collected. At the time of payment, the operator shall submit a return upon such forms and containing such information as the County or its Tax Administrator may require (which forms
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may include both information on taxes imposed by this ordinance and information on taxes imposed under Minnesota Statutes § 469.190). The return shall contain the following minimum information.
a. The total amount of rent collected for lodging during the period covered by the return.
b. The amount of tax required to be collected and due for the period. c. The signature of the person filling the return or that of his agent duly
authorized in writing. d. The period covered by the return. e. The amount of uncollectible rental charges subject to the lodging tax.
The operator may offset against the taxes payable with respect to any reporting period, the amount of taxes imposed by this ordinance previously paid as a result of any transaction the consideration for which became uncollectible during such reporting period, but only in proportion to the portion of such consideration which became uncollectible.
8. EXAMINATION OF RETURN, ADJUSTMENTS, NOTICES AND DEMANDS. The Tax Administrator shall, after a return is filed, examine the same and make any investigation or examination of the records and accounts of the person making the return deemed necessary for determining its correctness. The tax computed on the basis of such examination shall be the tax to be paid. If the tax due is found to be greater than that paid, such excess shall by paid to the Tax Administrator within ten days after receipt of a notice thereof given either personally or sent by certified mail to the address shown on the return. If the tax paid is greater than the tax found to be due, the excess shall be refunded to the person who paid the tax to the Tax Administrator within ten days after determination of such refund.
9. REFUNDS. Any person may apply to the Tax Administrator for a refund of taxes for a prescribed time period in excess of the amount legally due for that period, provided that no application for a refund shall be considered unless filed within one year after such tax was paid, or within one year from the date of the return, whichever period is the longer. The Tax Administrator shall examine the claim to determine the correctness of the claim and shall return any excess taxes paid. If no excess is found, the Tax Administrator shall so inform the applicant. If the claim is denied in full or in part, the applicant may make written application to the County Board of Commissioners for a hearing on the matter.
10. FAILURE TO FILE A RETURN. If any operator required by this ordinance to file a return shall fail to do so within the time prescribed, or shall make, willfully or otherwise, an incorrect, false or fraudulent return, the operator shall, upon written notice and demand given the person or by certified mail, file such return or corrected return within five days of receipt of such written notice and shall at the same time pay any tax due on the basis thereof. If such person shall fail to file such return or corrected return, the Tax Administrator shall file a return for such person from such knowledge and information as the Tax Administrator can obtain, and assess a tax on the basis thereof, which tax
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(less any payments theretofore made on account of the tax for the taxable period covered by such return) shall be paid within five days of the receipt of written notice and demand for such payment. Any such return or assessment made by the Tax Administrator shall be prima facie correct and valid, and such person shall have the burden of establishing its incorrectness or invalidity in any action or proceeding in respect thereto.
a. If any portion of a tax imposed by this ordinance, including penalties thereon, is not paid within 30 days after it is required to be paid, the County may institute such legal action as may be necessary to recover the amount due plus interest, penalties, and the costs and disbursements of any action.
b. Upon a showing of good cause, the Tax Administrator may grant an operator one 30-day extension of time within which to file a return and make payment of taxes as required by this ordinance provided that interest during such period of extension shall be added to the taxes due at the rate of 10% per annum.
11. PENALTIES.a. If any tax imposed by this ordinance is not paid within the time herein
specified for the payment, or any extension thereof, there shall be added thereto a specific penalty equal to 10% of the amount remaining unpaid.
b. In case of any failure to make and file a return within the time prescribed by this ordinance, unless it is shown that such failure is not due to willful neglect, there shall be added to the tax in addition to the 10% specific penalty provided in subsection (a) above, 10% if the failure is not for more than 30 days with an additional 5% for each additional 30 days or fraction thereof during which such failure continues, not exceeding 25% in the aggregate. If the penalty as computed does not exceed $25.00, a minimum penalty of $25.00 shall be assessed. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the negligence, in which case the amount so added shall be collected in the same manner as the tax.
c. If any person willfully fails to file any return or make any payment required by this ordinance, or willfully files a false or fraudulent return or willfully attempts in any manner to evade or defeat any such tax or payment thereof, there shall also be imposed as a penalty an amount equal to 50% of any tax (less any amounts paid on the basis of such false or fraudulent return) found due for the period to which such return related. The penalty imposed by this ordinance shall be collected as part of the tax, and shall be in addition to any other penalties provided by this ordinance.
d. All payments received shall be credited first to penalties, next to interest, and then to the tax due.
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e. The amount of tax not timely paid, together with any penalty provided by this section shall bear interest at the rate of 12% per annum from the time such tax should have been paid. Any interest and penalty shall be added to the tax and be collected as part thereof.
12. REVOCATION OR SUSPENSION OF LICENSE. Whenever an operator fails to comply with any of the provisions of this ordinance, the Board of Commissioners of Cook County may, after a hearing, suspend or revoke any licenses issued to the operator by the County. Before any such hearing, the operator shall be given 10 days written notice and the hearing shall be published in the legal newspaper of the County not less than 10 days before the date of the hearing.
13. ADMINISTRATION OF TAX. The Tax Administrator shall administer and enforce the assessment and collection of the taxes imposed by this ordinance. The Tax Administrator shall cause to be prepared blank forms for the returns and other documents required by this ordinance and shall distribute the same throughout the County (other than in the Tribal Lands) and shall furnish them on application, but failure to receive or secure them shall not relieve any person from any obligation required of him or her under this ordinance.
14. CONTRACT FOR TAX ADMINISTRATION. The Tax Administrator is authorized to confer with the Minnesota Commissioner of Taxation or other appropriate entity to the end than an agreement between the County and such other entity may be entered into for the purpose of providing for the administration and collection of the taxes imposed by this Resolution. Such an agreement shall not become effective until presented to the Board of Commissioners of the County for its approval and when so approved the tax imposed by this Resolution shall be collected and administered pursuant to the terms of said agreement and this ordinance. The fees charged by any Tax Administrator for administrative services and for collecting the tax herein imposed shall not exceed 5% of the gross proceeds of the tax so imposed.
15. ADMININSTRATION FEE. Minnesota Statutes §469.190 allows the Tax Administrator to charge a fee up to 5% of revenues collected from the tax to pay for the costs of administering the tax. Initially, the Tax Administrator shall charge a fee of 1% of total revenue collected from the tax in payment for those services, subject to review and potential increase at a later date.
16. EXAMINE RECORDS. The Tax Administrator and those persons acting on behalf of the Tax Administrator authorized in writing by the Tax Administrator may examine the books, papers and records of any operator in order to verify the accuracy of any return made, or if no return was made, to ascertain the tax as provided in this resolution. Every such operator is directed and required to give to the Tax Administrator or to his duly authorized agent or employee the means, facilities and opportunity for such examination and investigations as are hereby authorized.
17. VIOLATIONS. In addition to any other penalty prescribed herein, any person who shall willfully fail to make a return required by this ordinance, or who shall fail to pay the tax after written demand for payment, or who shall fail to
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remit the taxes collected or any penalty or interest imposed by this ordinance after written demand for such payment or who shall refuse to permit the Tax Administrator or any duly authorized agents or employees of the Tax Administrator to examine the books, records and papers under such person’s control, or who shall willfully make any incomplete, false of fraudulent return shall be guilty of a misdemeanor.
18. USE OF PROCEEDS; ANNUAL BUDGET REVIEW. In accordance with Laws 2008, Chapter 366, Article 7, Section 17, the proceeds obtained from the collection of taxes pursuant to this Resolution shall be used to fund the Events Bureau, provided that the County Board of Commissioners shall annually review the budget of the Events Bureau and the Events Bureau may not receive revenues raised from the taxes imposed by this ordinance until the Board of Commissioners has approved the Annual Budget. The Annual Budget of the Events Bureau for the current fiscal year (July 1, 2008 through June 30, 2009) applicable to the taxes imposed by this ordinance following the effective date of this ordinance has been reviewed and is hereby approved by the Board of Commissioners. An Annual Budget for the Events Bureau for each fiscal year shall be submitted to the Board of Commissioners annually prior to June 30 of each year for so long as taxes under Laws 2008, Chapter 366, Article 7, Section 17 continue to be collected.
19. APPEALS.a. Any operator aggrieved by any notice, order or determination made by
the Auditor-Treasurer under this ordinance may file a petition for review of such notice, order or determination detailing the operator’s reasons for contesting the notice, order or determination. The petition shall contain the name of the petitioner, the petitioner’s address and the location of the lodging subject to the order, notice or determination.
b. The petition for review shall be filed with the Auditor-Treasurer within ten days after the notice, order or determination for which review is sought has been mailed or served upon the person requesting the review.
c. Upon receipt of the petition, the Auditor-Treasurer, or his designee, shall set a date for a hearing and give the petitioner at least five (5) days prior written notice of the date, time and place of hearing.
d. At the hearing, the petitioner shall be given an opportunity to show cause why the notice, order or determination should be modified or withdrawn. At petitioner’s own expense, counsel of petitioner’s choosing may represent the petitioner.
e. The hearing shall be conducted by the Auditor-Treasurer or his or her designee, provided only that the person conducting the hearing shall not have participated in the drafting of the order, notice or determination for which review is sought.
f. The person conducting the hearing shall make written findings of fact and conclusions based upon the applicable sections of this ordinance
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and the evidence presented. The person conducting the hearing may affirm, reverse or modify the notice, order or determination originally made by the Auditor-Treasurer.
g. Any decision rendered by the Auditor-Treasurer or his or her designee pursuant to this section may be appealed to the Board of Commissioners of the County. A petitioner seeking to appeal a decision must file a written notice of appeal with the Auditor-Treasurer within ten days after the decision has been mailed to the petitioner. The matter will thereupon be placed on the Board of Commissioner’s agenda as soon as is practical. The Board shall then review the findings of fact and conclusions to determine whether they were correct. Upon a determination by the Board that findings and conclusions were incorrect, the Board may modify, reverse or affirm the decision of the Auditor-Treasurer or his or her designee upon the same standards as set forth in subsection (f) above.
20. PRIVACY OF DATA. Data collected from individuals or persons pursuant to this ordinance shall be considered private data on individuals or non-public data pursuant to Minnesota Statutes §, Section 13.01 et seq.
21. EFFECTIVE DATE. This Resolution shall become effective December 1, 2008.
Reading: November 10, 2008
