The Village of Cottage Grove Tourism Commission voted to recommend that the Village Board consider lowering the village's room tax rate from 8% to 7%, commissioners decided at their March 19 meeting.

The recommendation matters because the room tax funds the village's tourism and marketing activities. Commission staff told members the commission collects the tax from local hotels and short-term rentals and forwards proceeds to the tourism entity that markets Cottage Grove.

Bridal Leach, executive director of the Cottage Grove Chamber of Commerce, gave the commission an update on how the tourism funds have been used since the commission adopted its 2025 budget in December. Leach said the chamber approved roughly $51,000 in grant support for local events and has engaged contractors to boost Cottage Grove's online presence, including a short promotional video with Discover Wisconsin, blog posts to improve SEO and sponsored Facebook posts, and professional photography with Stutz Photography. "Once we air the video, which should be aired September, October, Bridal Cottage Grove will have the rights to the video," Leach said.

Cameron, a village staff member who filed the annual room-tax report, told the commission the village collected $136,144 this year and that the currently imposed room-tax rate is 8%. Cameron said the total was within a few hundred dollars of the prior year and that the number of taxable rooms was "overall consistent." The report also noted three Airbnbs the village is aware of; Cameron said enforcement of third-party short-term rentals remains the responsibility of the renting agency and the village currently lacks a mechanism to force compliance.

The commission discussed a request originating from Comfort Suites, operated under Badger Group LLC (and referenced in meeting materials as Graywolf Partners), asking the village to consider lowering the room-tax rate to increase hotel competitiveness. Jen, the general manager at Comfort Suites, told commissioners that for some guests the combination of room rate plus taxes creates a psychological price barrier: "When you think of Comfort Suites, just in general when you're going on vacation, you don't think that you're gonna pay $200 a night to stay here," she said, and added that the added percentage in taxes contributes to that perception.

Commission members debated whether a 1 percentage-point reduction would meaningfully change booking behavior and weighed the trade-off that lowering the rate would reduce funds available for marketing. One member observed that a decrease from 8% to 7% would be a modest per-room reduction but noted the effect accumulates across all room-nights. Cameron estimated the commission's 1% cut would reduce the chamber's funds by roughly $11,875 based on current collections.

After discussion, a member moved and a second was offered to recommend that the Village Board reduce the room-tax rate from 8% to 7%. The commission voted in favor; the motion passed. Commission staff said the recommendation will go to the Village Board likely on its April 7 agenda for consideration; if the board adopted a change, staff suggested it would probably be effective on April 1, though the board would set the final effective date.

Commissioners also discussed outreach and tracking. Leach said the chamber has been using Google Analytics and Facebook sponsor metrics to measure some activities and that Discover Wisconsin will provide impressions and engagement metrics for the short video. Leach said the chamber and media buyers can provide more granular data at a cost, including origin by ZIP code for visitors. The commission asked that examples of the potential numerical impact to both hotel revenue and tourism-fund revenue be supplied to the Village Board if the recommendation is forwarded.

The commission closed the item and moved on to future agenda items. The recommendation to reduce the rate to 7% will be a Village Board decision; the commission's action was to forward the recommendation for board consideration.