Minocqua Room Tax Under Review
MINOCQUA – After many years of having a 4 percent room tax, Minocqua is proposing increasing it to 5 percent or perhaps higher.
The town board Tuesday discussed the pros and cons but found few reasons not to increase it. For instance, Minocqua ranks near the bottom of room tax surcharges in the state, according to town chairman Mark Hartzheim.
He pulled data from the state Department of Revenue to show that of the 44 communities he surveyed, all but Minocqua, Tomahawk and Hayward have higher rates. Most begin at 5 percent. Merrill, Antigo and LaPointe are at 6 percent. Three cities top out at 10 percent.
Currently, Minocqua imposes the tax through a room tax commission. That body represents the towns of Minocqua, Arbor Vitae and Woodruff. All three have to agree to an increase before it would take effect.
The town chairman said the town provides services and amenities to some 50,000 summer tourists far and above what the town’s 4,500 permanent residents normally would provide. They include the parks, police protection, boat launches and library, among others.
Hartzheim also laid out a proposal to change the formula for room tax distribution. Currently, the Minocqua chamber (Let’s Minocqua Visitors Bureau + Chamber of Commerce) gets 75 percent of the proceeds, with the towns at 25 percent. The towns might consider changing it so that the chamber gets 70 percent; the towns 30%, he said.
In 2020, the 25/75 split saw the town’s portion of room tax at $113,343; the chamber’s at $340,029.
Under a 5 percent tax and the same 25/75 split, the town would receive $141,679; the chamber $425,036. But a 30/70 split would increase the town’s portion to $$170,014; the chamber would drop to $396,701 – but would still be above its 2020 distribution.
Supervisor Sue Heil, who owns a resort, indicated accommodation business “would be on board” with the increase if the town can show the benefits that the town is providing tourists. Motels, resorts and the like do not pay the room tax out of their own pocket; they merely collect it and forward it to the towns.
Supervisor Bill Stengel said he was “not in favor of raising taxes,” but allowed that the town services perhaps warranted an increase in the room tax. “I’m open to this discussion. I want to hear from the stakeholders (accommodations interests).”
The discussion was entirely one-sided Tuesday. Hartzheim said he thought the chamber’s executive director Krystal Westfahl would be attending. Nonetheless, he and others said they want her and accommodation representatives at the next meeting to further discuss the two proposals.
Hartzheim said he will notify the other two town chairmen to get the ball rolling on their end. Any increase would not take effect until next year at the earliest.