Messages from the President
Tackling The Topic Of Tourism Tax - November
By: Anna Tanski | October 25, 2015
With local elections just around the corner, Duluth is buzzing over candidates positions regarding key issues. Each conversation Iâ€™ve had with City Council candidates highlights the tremendous impact tourism has in our community as well as answers why the dollars invested in tourism cannot be used to repair our streets and aging infrastructure.
In March 1969 the Duluth City Council approved a 3% hotel-motel tax and mandated the first 5% of these collections or $5,000, whichever is greater, be allocated to the general fund. Of the balance, 65% was dedicated to the Arena-Auditorium and 35% to advertising and publicity.
On two separate occasions, January and June 1977, an additional hotel-motel tax and a 1% food and beverage tax were approved. The proceeds of the new lodging tax were to be devoted to one or more recreational, cultural or civic projects. The enabling legislation that created the food and beverage tax was originally approved by the State to sunset July 1, 1979. This law was first extended to remain in effect until December 31, 1992, then in 1991 was extended permanently. State statute authorizing this tax and the city ordinance imposing it stipulate revenues must be used to pay for activities conducted by the City or other organizations which promote tourism in the city.
1980 and 1990 each brought forth an additional 1% hotel-motel tax. In July 2008 a .75% food and beverage tax was added to fund the AMSOIL Arena addition to the Duluth Entertainment Convention Center.
Finally, 2014 saw the reimplementation of the .5% food and beverage tax and .5% hotel-motel tax (commonly referred to as the half and half tax) to fund the Cityâ€™s portion of the proposed redevelopment of the St. Louis River Corridor.
Yes, eating out means youâ€™re contributing to the tourism tax base. However, the majority of these taxes are collected from out of towners helping finance amenities locals can enjoy year round. And when it comes to Visit Duluthâ€™s promotional efforts, itâ€™s really visitors paying to attract more visitors.
2015 collections are on pace for a record-breaking year, anticipated to be well in excess of $9 million. While state law prohibits using these funds for city infrastructure improvements which are needed, thereâ€™s no question residents benefit greatly from the infusion of resources generated for arts and culture, various attractions and community venues.
Anna Tanski, President/CEO