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Chamber urges Little Falls to keep 3% lodging tax as council questions auditing and revenues
Summary
The Little Falls Area Chamber of Commerce and Tourism asked the council to continue the city’s 3% lodging tax, saying it funds tourism promotion; council members pressed presenters on auditing and revenue figures and asked staff to follow up.
Sabrina Kelch, tourism and marketing director for the Little Falls Area Chamber and Tourism, and Perva, president and CEO of the Little Falls Area Chamber of Commerce and Tourism, urged the Little Falls City Council to continue the city’s 3% lodging tax at a special work session on Oct. 20.
“This tax is vital engine for our local economy,” Kelch said, adding that the tax is paid by visitors and that “by state law, 95% of this revenue goes directly towards tourism promotion.” The presenters said the Chamber used lodging-tax funds for marketing; Kelch said the Chamber’s tourism budget was about $104,000 and credited promotional work with raising visitor inquiries.
Council members followed with detailed questions about how the tax is collected and verified. One council member asked, “How does — I mean, how do we know that all the lodging are paying their fair share? Is there an audit process?” Kelch answered that the city collects the tax and the Chamber does not audit operators’ books: “We don’t get involved with the collecting at all…we don’t have an auditing process for the amount of tax. So it is self-declared.”
During the discussion a council member noted a different figure for 2023, saying the city recorded about $123,000 in lodging tax that year; presenters and councilors clarified that the roughly $104,000 figure referenced the most recent year’s lodging-tax receipts. Council members pressed staff to look into whether the city can improve verification or auditing of remittances without imposing undue burden on local businesses.
Councilors also asked whether restaurant and bar collections are treated the same as lodging; presenters confirmed both are remitted monthly and both fund tourism activities. No formal action or vote was taken; council members asked staff to follow up with more information about audit and compliance options.
The council did not make a decision on the lodging tax at the meeting; staff will report back with more detail.
