Communities finalizing their positions on the increase in room tax
13 agree, five have already signed a new ordinance, intergovernmental agreement
Thirteen communities in Door County agreed to increase the tax on room accommodation to 8%, triggering the Door County Tourist Zone Commission (DCTZC), which collects and distributes the room tax, to send a new room tax ordinance and an intergovernmental agreement to all municipalities in Door County. .
The documents were distributed on July 28 and five municipalities had already signed them by the deadline for this issue of Impulse.
Room tax is charged to visitors staying at hotels, guesthouses, motels, and short-term rental (STR) properties. The movement to increase it from 5.5% to 8% began in 2020 in the town of Baileys Harbor with its then president, David Eliot. The impetus behind the increase was to generate more revenue for municipalities to maintain infrastructure such as parks, streets, fire stations and emergency service equipment. Thirty percent of room tax revenue generated within a municipality goes back to that municipality to be spent as it sees fit.
It took two-thirds – 13 of the county’s 19 municipalities – to force the room tax increase and DCTZC action to send the new documents. The 13 municipalities that agreed in advance to sign the ordinance and the intergovernmental agreement are the cities of Baileys Harbor, Egg Harbor, Gardner, Gibraltar, Liberty Grove, Nasewaupee, Sevastopol, Sturgeon Bay and Washington; the Town of Sturgeon Bay; and the villages of Egg Harbor, Forestville and Sister Bay.
To date, the towns of Baileys Harbor, Gibraltar, Liberty Grove and Sturgeon Bay have signed the documents.
The rate change would take effect on January 1, 2022. Reservations and deposits made this year for next year would still be taxed at 5.5%, said Josh VanLieshout, chairman of the DCTZC.
“New reservations would be at 8% [rate] when there was a sale from January 1, ”he said.
The new ordinance also strengthens the ability of the DCTZC to apply and collect the accommodation tax on short-term rentals.
“The STR online hosting and business markets – Airbnb, Vrbo [through which STRs rent their units] – are really two different things, ”said VanLieshout. “DOSs are the people who own or operate homes or condos. The commission’s approach is that we want to make sure that the people who actually own the rented building know that they are responsible for the lodging tax.
The towns of Clay Banks, Forestville and Jacksonport voted against the lodging tax increase. The Village of Ephraim and the cities of Brussels and Union had not committed one way or the other, but the Village of Ephraim committed Tuesday evening and unanimously signed the documents.
County tourism officials hope all municipalities embrace the change and stay with the DCTZC, which currently includes all municipalities in Door County.
“From our perspective, we want to do everything in our power to keep the 19 municipalities in the area,” said Jon Jarosh, Interim CEO of Destination Door County (DDC). “It continues this collective approach in managing Door County as a one-stop destination. “
DCTZC and DDC officials intend to tour all municipalities to answer questions, including those that remain without commitment or said no in the first round.
One of them was the city of Jacksonport, and now Randy Halstead, chairman of the city council, has said he’s not sure what the city will do.
“We’ll wait and see if they have the numbers and then discuss them,” Halstead said.
Halstead said the city was unwilling to increase visitor rates following a pandemic that has stressed the accommodation industry.
“We felt it was a bad time to do it with everything that was going on with the pandemic,” Halstead said. “I’m sure some people have had financial problems. We didn’t want to make it difficult for them.
When the DCTZC was formed in 2007, not all municipalities in Door County joined right away, but by 2010 all were on board, including the town of Sturgeon Bay, the last hurdle.
This time around, VanLieshout said the DCTZC had not explained how it would deal with latecomers.
“I can’t imagine the commission saying, ‘No, we’ll never let you in,'” he said. “I imagine for communities that maybe it takes a while, or that choose not to do it early on or want to come in a year, I imagine the powers that be would say, ‘Yeah, come in. . “
If a community leaves the commission, SDC will likely stop supporting tourism initiatives and infrastructure within those communities.
“This would make our job as head of marketing and destination management [organization] much harder if suddenly there weren’t 19 municipalities left in the area – if that part of Door County wasn’t really one of them, ”Jarosh said. “Because visitors don’t care. “