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Council hears tax update; members push for licensing of short-term rentals
Summary
City staff said the restaurant tax was not renewed by the state legislature and lodging tax collection continues; council members raised enforcement concerns about Airbnbs and discussed possible licensing and code changes to ensure parity with B&Bs.
At the June 1 Little Falls City Council information session, city staff told council the state legislature did not act to renew the restaurant sales tax this year, while lodging tax collections and designated lodging revenue for the chamber/tourism remain in place.
"The restaurant tax renewal did not get addressed at the uh legislature this year. So because of that, it did not, uh, get renewed," Alex (city staff) told council, and said staff will prepare ordinance language for the next meeting to remove restaurant tax references from city code if the council wishes to proceed.
Why it matters: the restaurant tax had provided a small source of revenue for tourism; its lapse will require code cleanup and a council decision if staff should pursue reauthorization next year.
Airbnb compliance and licensing Several council members, including Raquel, raised concerns that short-term rental units operating via platforms such as Airbnb are difficult to locate and therefore difficult to regulate and tax. "I would like to see all Airbnbs have to be licensed to operate within the city," Raquel said, noting the city code currently addresses B&Bs but not platform-based short-term rentals.
Council and staff discussed enforcement practicality: identifying transient rentals, the staff time required to monitor compliance, and whether licensing would be set up to avoid imposing disproportionate effort relative to the revenue involved. Staff noted some Airbnbs are compliant; others are harder to track and staff invited suggestions on how to locate them.
Other council business Staff also updated council that the five-year lease on three golf-course mowers approved in 2021 has concluded and the mowers are now owned outright. "We own the three mowers we've been making payments on," a staff member said, and promised to provide exact past payment figures on request.
A council member reported constituent complaints about a rough railroad crossing; staff confirmed BNSF has been contacted and repair and paving appear planned. Council also queried ownership of several small buildings near Dairy Queen; staff said they would follow up on property records.
Next steps Staff will draft ordinance language to remove restaurant tax references if directed, research options for short-term rental licensing and enforcement, and return with more specific recommendations on code changes and fee implications. No votes were taken at the information session.
