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Emotions run high during short-term rental tax discussion at courthouse

Vacation rentals are common on the North Shore. Photo by Joe Friedrichs
Vacation rentals are common on the North Shore. Photo by Joe Friedrichs

The muddy waters of how much short-term rentals should be taxed did not get any clearer during a busy meeting of the Cook County Board of Commissioners Tuesday, Jan. 28 at the courthouse in Grand Marais.

After nearly two hours of discussion on the topic of short-term rental tax classification, the county board opted to not take any action regarding a proposed resolution that was presented by the local chamber of commerce.

Cook County Chamber of Commerce Executive Director Jim Boyd shared information regarding the resolution he and a number of local business owners would like to submit to the state Legislature regarding short-term rental tax classification. Language in the resolution specifically requests changing how much vacation rentals will be taxed. As of Jan. 1, if a short-term rental operation, be it a cabin in the woods or a privately owned condominium at Bluefin Bay Resort, is rented for more than 183 days during a calendar year, the property will be taxed at the commercial rate. Among other requests, the resolution calls for creating a new tax bracket for short-term rentals.

Boyd, on behalf of a collection of local business owners, was seeking the support of the county board regarding the resolution. As it stands now, Boyd said, the local economy is at risk due to tax issues facing owners of short-term rentals.

Meanwhile, Cook County Assessor Bob Thompson said he has concerns about the resolution as it was presented during Tuesday’s meeting. According to Thompson, information shared by the business community during Tuesday’s meeting was misleading.

With regard to the resolution as a whole, Thompson said it has a variety of statements he could simply not support, including the claim that property taxes would triple for most short-term rental operations. 

As is standard for regular meetings of the county board, the meeting opened with a public comment period. Both statements shared during the public comment period focused on short-term rentals in Cook County and how changes to their tax rate could impact the local economy.

In an emotional statement, local resident and business owner Abby Tofte shared her concerns about changes to how short-term rentals are taxed in Cook County. Tofte said the higher taxes could hurt the tourism-based economy.

Mary Somnis from the local Economic Development Authority also shared her concerns during the public comment period about short-term rental tax classification. Somnis said changes to the tax structure could impact property values and taxes of all properties and homes across the county. Somnis also said tourism and the overall economy could be greatly impacted by changes to short-term rental tax classification.

With the legislative session set to begin Feb. 11 in St. Paul, Board Chair Myron Bursheim says State Senator Tom Bakk is interested in the resolution and the county board’s stance on the issue. According to Boyd, Bakk would like to be presented with the resolution by mid-February, should the board ultimately vote to approve one.

Following the lengthy discussion, the board voted to meet in full with Thompson, Boyd, Linda Jurek from Visit Cook County, Interim County Administrator Rena Rogers and County Attorney Molly Hicken present.

The workshop-style discussion scheduled for within a week will count as an official meeting due to the fact the full county board will be present.