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Marshall City council adopts ordinance requiring monthly lodging-tax reports
Summary
The Marshall City Council approved an ordinance that moves hotel lodging-tax reporting from quarterly to monthly, narrows the hotel definition to one or more rooms, and gives the Marshall Tourism Commission clearer audit authority and a nonpayment checklist. Airbnb and short-term rentals are excluded for now.
Marshall City — The Marshall City Council approved an ordinance changing how the city collects lodging taxes from hotels, moving from quarterly to monthly reporting and giving the Marshall Tourism Commission clearer authority to audit and follow up on unpaid reports.
The change requires hotels to file monthly tax reports and pay within 30 days after every month’s end, rather than reporting quarterly, according to Rebecca, Marshall’s tourism director. Rebecca said the tourism commission will use the new schedule to audit records more promptly and follow a nonpayment operations checklist the commission created.
The ordinance also revises the lodging definition: previously defined as properties with five rooms or more, the ordinance lowers that threshold to one room or more. Rebecca said the change affects about five hotels in Marshall and is intended to increase transparency and tracking for a tax that was “voted on in 02/2004” and brings in “six figures” annually for the city.
Council members raised questions about enforcement and verification. Council members asked whether the commission would cross-check hotel submissions with county or state filings; Rebecca said the commission can audit those records and plans to do so, but that the city has not done regular audits in the past because there were no written procedures. She said the new reporting forms were redesigned to follow state tax regulations and to make verification easier.
Rebecca said the ordinance does not currently apply to short-term rental platforms such as Airbnb. She said she is researching options with Airbnb and will work with the city attorney on a future ordinance to include short-term rentals; if adopted later, Airbnb can be set up to collect the tax automatically.
Rebecca described the tourism commission’s enforcement authority as including audits and follow-up steps up to potential closure for nonpayment, and said the commission will lead audits with support from the county collector and city office, with the new schedule expected to begin in April. She said the commission has a minimum of five board members and that she is the only paid contractor to lead the auditing initiative.
The council moved and seconded adoption of the ordinance and approved it by roll call vote; the roll-call responses recorded in the meeting transcript were unanimous yes votes.
The ordinance also formalizes the tourism fund’s purpose: using lodging-tax revenue to promote tourism and to make grants to local entrepreneurs and organizations for tourism-related projects. Rebecca said the commission expects a larger grant budget this year because of rolled-over funds from the prior year.
Background: The lodging tax was established by a local vote in February 2004, according to statements in the meeting. The council did not provide an estimate of lost revenue from prior underreporting; Rebecca said she did not have a precise figure and that the goal is to ensure accurate reporting going forward.
