Council introduces amendment to lodging‑tax ordinance to transfer short‑term rental collection to state

The Marshall City Council introduced an amendment to chapter 7, article 2 of the city code to change how lodging tax for short‑term rentals is collected.

City Attorney Pam Whitmore and staff said that short‑term rental activity has increased locally (staff counted about 15 short‑term rental listings compared with one or two a few years ago) and that the State of Minnesota has mechanisms to collect lodging taxes directly from platform providers (such as Airbnb and VRBO). Whitmore said state collection offers additional enforcement and consistency compared with manual submissions by lodging establishments.

Staff explained that, under the proposed approach, platforms would collect lodging tax on behalf of hosts and remit it to the state, which would then remit the city’s share quarterly to Marshall alongside sales and use tax distributions. Council members supported introducing the amendment and the motion to introduce the ordinance change was approved by roll call vote.

Staff and the city attorney said the change should reduce administrative workload for city staff who currently track irregular submittals, and increase transparency and consistency in lodging tax receipts. The ordinance will proceed through the normal introduction, public notice and adoption steps required by law.