Tax classification for eight lodging properties changing
A number of Cook County lodging establishments are going to be paying a lot more in property taxes next year than they have been paying in recent years.
Eight properties will now be classified as commercial rather than seasonal resorts after a review by County Assessor/Land Commissioner Mary Black and Larry Austin, Cook County’s Minnesota Department of Revenue property tax compliance officer.
There is a somewhat complicated MN statute explaining what it takes to be classified as a seasonal resort. It boils down to an either/or statement that Cook County was interpreting one way and the state another.
Assessor Black said that she had interpreted the law to be saying that a lodging establishment could be designated a seasonal resort if it received 20 percent of its income from charges related to providing recreational activities OR have 60 percent of their bookings be for at least two consecutive nights. However, the state is requiring all seasonal resorts to prove that 20 percent of their income came from charges related to providing recreational activities, something a lot of them will have difficulty doing, Black said.
As an example of the effects of the potential increase—with the seasonal resort designation in 2011, Best Western Superior Inn and Suites in Grand Marais paid $38,818. Without the seasonal resort designation in 2012, Best Western would have to pay $96,526.
Assessor Black resigned from her position to pursue her health and fitness business and her last day was September 14. She said the seasonal resort issue would be something the new assessor would be dealing with significantly, and she expected the Department of Revenue to work very closely with the new assessor on it.