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Le Mars council approves ballot language to raise hotel-motel tax to 7%
Summary
The Le Mars City Council approved ballot language to ask voters Nov. 4, 2025, to raise the city's hotel-motel tax from 5% to 7%, with the proposed increase to take effect Jan. 1, 2026, and to expire Dec. 31, 2041. Council members discussed revenue use, sunset length and local priorities before adopting the resolution.
The Le Mars City Council on a voice vote approved language to place a proposed increase of the city's hotel-motel tax from 5% to 7% on the Nov. 4, 2025, regular election ballot. If approved by a majority of voters, the increase would begin Jan. 1, 2026, and would expire Dec. 31, 2041.
City staff told the council that Iowa Code chapter 423A authorizes cities to impose a hotel-motel (also called a local option) tax at a rate not to exceed 7%. The administration recommended the council approve the proposed ballot language. Staff said at least 50% of revenue collected under the tax must be used to acquire, construct, improve, equip, repair, operate or maintain recreation, convention, cultural or entertainment facilities or to promote tourism and conventions; the remaining revenue may be used for other lawful city purposes.
During discussion, a speaker estimated the city currently collects roughly $200,000 per year in hotel-motel tax revenue and said raising the rate from 5% to 7% would increase receipts by several thousand dollars annually rather than producing a very large windfall. Council members asked whether the measure should include a sunset date; one councilmember said they preferred a shorter sunset so future councils would not be constrained by this council's decision. A resident also raised unrelated agenda priorities such as revisiting the tree ordinance and development incentives; the mayor redirected the meeting back to the hotel-motel tax item.
The council moved to adopt Resolution 25-28 (calling the proposition to increase the hotel-motel tax to 7%) and the motion was seconded and carried following a roll call. Specific roll-call vote tallies were not specified in the meeting transcript.
The measure will appear on the Nov. 4, 2025 ballot if the council's action is not changed; voter approval would be required to increase the rate to 7% under state law. The council documented a proposed effective date of Jan. 1, 2026, and an expiration date of Dec. 31, 2041 in the ballot language adopted.
