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Business & Economics

Minocqua sets stage for room tax increase

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MINOCQUA – Minocqua’s room tax, which has remained stagnant at 4% since the mid-1980s, should go up to 5 ½%, but not until Jan. 1, 2023.

That was the unanimous decision of the Minocqua town board last week after hearing concerns from accommodation representatives that they needed time to inform repeat customers of the increase.

Supervisor Brian Fricke’s motion to increase the room tax to 5 ½% also included changing the disbursement formula, so that the towns would get 30% of the proceeds; the chamber 70%.

Motel, hotel and resort owners don’t pay the tax out of their own pockets. They do however have to collect it and turn it over to the respective government bodies.

In Minocqua’s case, the room taxing body is comprised also of the towns of Woodruff and Arbor Vitae. That means the other two town boards would also have to agree to the increase.

Town chairman Mark Hartzheim said the Woodruff town board is on record as willing to go as high as 7 1/2%. Arbor Vitae has yet to take up the matter. All three towns would need to adopt an identical ordinance authorizing the increase and formula change, he added.

Making it a better place to visit

Hartzheim outlined ways the town has made Minocqua more attractive to visitors, as well as towns people. The town pays for the Fourth of July fireworks; it added a new park on Highway 70 West; maintains restrooms in the downtown; provides an outstanding library; financially supports the local snowmobile club and Winter Park Nordic Center, and puts up welcome banners and Christmas lights, among other endeavors.

Let’s Minocqua visitor bureau/chamber director Krystal Westfahl walked the board through a lengthy document showing the chamber/visitor center’s various programs and marketing efforts, much of it revolving around the use of room tax. The chamber was not opposed to the tax increase, but wanted assurances it would not be harmed financially.

Currently, the chamber receives 75% of the room tax collection, while the towns get a quarter of that. Minocqua, with the largest share of accommodation businesses, gets 87% of the towns’ share; Woodruff’s share is tiny in comparison, less than 2%. Arbor Vitae’s comes in at about 11%.

Hartzheim said the chamber would see more room tax proceeds with a 5 ½% rate, despite receiving a lower percentage. The chamber is projecting that it will receive $436,000 in room tax in the next fiscal year. According to Hartzheim’s calculations, the chamber could see upwards of an additional $100,000 from just the Minocqua area once the 5 1/2% rate goes into effect.

Westfahl said the increased funding would enable the chamber to “more strongly” market the area. “It gets us in the ballpark of other, larger destinations,” she said later. Her goal of a million-dollar budget would put the chamber “within striking distance of the ‘Door Counties’ of the world.”

Give us time

The primary concern of the 10 or so accommodation representatives, including Brigit Haucke of Nitschke’s Northern Resort and Mary Martin of The Beacons of Minocqua, was to delay the increase until 2023. Some facilities have anywhere from 50-80 percent of their rooms already booked for 2022. They did not want to go back and tell customers there would be an added charge. Westfahl said the delay would allow contracts to be updated to reflect the increased room tax.

Dennis Robertson, owner of Dillman’s Bay Resort in Lac du Flambeau, cautioned against adding more tax at a time when many businesses are still struggling financially. “It’s a bad time to raise taxes,” he said. While he doesn’t collect room tax, he does pay a marketing assessment to the Minocqua chamber.

Westfahl plans to meet with the Arbor Vitae town board on Nov. 17, and later with Woodruff’s, to present the chamber’s overall marketing and resources program.

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