Bakk shares update on short-term rental tax class for Cook County

A memo from the Minnesota Department of Revenue dated May 21 that was sent to every county assessor in the state says any property where the primary use of the home is a short-term rental should be classified as a 3a commercial property.

According to Cook County Assessor Bob Thompson, a questionnaire will be sent in early December to anyone the county thinks is operating a short-term rental at their property. The purpose of this questionnaire is to determine the primary use of the property. 

Currently, at least in Cook County, short-term rentals are classified as residential non-homestead and pay a significantly lower property tax than they would pay if taxed at the commercial rate.

“Short-term rentals” include family cabins in the woods that are rented by the night, homes and other units in Grand Marais that sit in the allowed-use zone and condominiums in developments like Bluefin Bay, Lutsen Resort and Caribou Highlands.

Leading up to the likely tax classification change for short-term rentals in Minnesota starting in 2020, a meeting took place Nov. 25 that included State Sen. Tom Bakk, Gov. Tim Walz and Department of Revenue Commissioner Cynthia Bauerly.

WTIP’s Joe Friedrichs spoke Sen. Bakk about that meeting and what comes next in determining a tax class for short-term rentals in Cook County.