Curses! Minneapolis will lose nearly $2M in hotel taxes next year
The looming flood of Super Bowl tourists is a prime opportunity for Minneapolis to make some money on lodging taxes -- cash used to bolster city services for residents, courtesy of out-of-town guests.
But instead of maximizing this revenue ahead of the biggest event of 2018, Minneapolis’ lodging tax was inadvertently reduced on October 1. The result: a projected loss of $1.6 to $1.8 million per year. The missed opportunity in a Super Bowl year could be even greater.
So how did this happen?
It all started last year when Republican legislators resisted funding light-rail projects. That led to the breakup of the regional, five-county Counties Transit Improvement Board, which raised money for public transportation. To make up for the difference in funding that supported metro projects, Hennepin County imposed a 0.5 percent sales tax.
State law caps the city’s cumulative state and local sales, entertainment, and lodging taxes at 13 percent. Lodging tax has a maximum rate of 3 percent. So when Hennepin County introduced that extra half-cent sales tax, the Minneapolis lodging tax was forced to drop by the same amount, from 2.625 percent to 2.125 percent.
Read more: http://www.citypages.com/news/curses-minneapolis-will-lose-nearly-2m-in-hotel-taxes-next-year/454734333