Legislative deadlock delays change to short-term vacation rental tax classification

The Cook County Chamber’s government relations specialist Judy Erickson gave a report to the Chamber at their last meeting on legislative activities in the wake of the COVID-19 pandemic. The coronavirus has impacted not just the health and economy of the State of Minnesota, but government operations as well.

Erickson gave a good news/bad news report, starting with the news that the language that the Chamber and Cook County brought forward regarding the taxation of short term vacation rentals had been accepted by both the Senate and House of Representatives.

However the bad news is that there will be change for short term vacation rental property owners this year as no action was yet been taken on the tax bill.

Erickson explained that the tax bill has been paired with the bonding bill, which is in limbo because House Speaker Kurt Daudt wants Governor Tim Walz to give up his COVID-19 pandemic emergency powers before the Republican minority agrees to move ahead with bonding.

The emergency powers must be revisited every 30 days and at that time a special session is called to give the legislature the opportunity to rescind the order. Erickson said the next session will be Friday, September 11.

According to Erickson, there will likely be no action once again, because the legislature is in the midst of bonding from previous years. When bond sales are in progress, the state cannot make any changes to its finances.

But, she said she is “cautiously optimistic” that an agreement on the tax and bonding bill will be reached soon, possibly on September 21.

The news on funding for the the Gitchi Gami Gami Bike Trail, in the Lutsen area, is that it will likely not be funded. Erickson said the legislature received $5 billion in requests for projects with $1.35 billion available.

Erickson said her company will keep working with Senator Tom Bakk and Representative Rob Ecklund to get some funding for the trail, but with so many projects before the state, it may not make the cut.  

WTIP Community Radio has had extensive coverage of the short term vacation rental tax classification issue. WTIP's Rhonda Silence spoke with Erickson in the interview below.

Also click below to see previous reports. 

Emotions run high during short-term rental tax discussion at courthouse - Jan. 28, 2020

A tax policy confusion: Where do short-term rental properties fit? - Jun. 16, 2019

Planning commission approves vacation rental ordinance - May 9, 2019