State Budget Progress Today!
September 6, 2017
  
Dear WH&LA Lodging Member:
 
While Joint Finance is on a break for an hour before they wrap up just a few final motions before the State Budget proposal moves on to both the State Senate and State Assembly, we wanted to update you on what has happened so far this afternoon.

Personal Property Tax
The WH&LA has been part of a broad coalition of business organization pursuing a reduction or elimination of Personal Property Tax charged by many municipalities on business equipment and supplies. As a first step, Joint Finance Committee did approve a new exemption for machinery that is not used for manufacturing. This is defined as "a structure or assemblage of parts that transmits force, motion, or energy from one part to another in a predetermined way by electrical, mechanical, or chemical means," which would include machinery such as laundry machines and dishwashers on your premises, etc.

This is what was projected in our last Capitol Insider, however we did not have the applicable definition of "machinery." This would apply effective with property assessed as of January 1, 2018. As this alone cost the state $74 million annually in offsetting payments to municipalities, it was a first step with further steps needed in coming years to accomplish full repeal of this form of annual antiquated double taxation on Wisconsin businesses.

Short-Term Rentals
After numerous meetings, negotiations, and a lot of hard work, another compromise that the WH&LA played a pivotal role in, of course with major assistance from key leadership in both the state Senate and State Assembly, the following advancement is now moving forward:
  • "Lodging Marketplaces" (such as Airbnb, HomeAway, etc.) will be required to register with the state DOR to rent out "short-term rentals," as defined in the motion
  • A "Lodging Marketplace" is defined as an entity that provides a platform through which an unaffiliated third part offers to rent a short-term rental to an occupant and collects the consideration for the rental from the occupant.
  • The Lodging Marketplaces will be required to collect state sales tax AND LOCAL ROOM TAX (in municipalities with a room tax) on rentals of "Short-term rentals," and must remit the collections to the state and municipality. They must also notify the property that they have done so.
  • A "Short-term rental" is a residential dwelling that is offered for rent for a fee for fewer than 29 consecutive days
  • The owner or operator of a Short-Term Rental who rents it out more than 10 nights a year must obtain a "tourist rooming house" license from DATCP, and get a local permit if required locally.
  • A "residential dwelling" is any building, structure, or part of the building or structure that is used or intended to be used as a home, residence, or sleeping place by one person or by two or more persons maintaining a common household, to the exclusion of all others
There is a second component pursued by the Realtors and others representing municipal concerns that does the following:
  • A municipality or county is not allowed to prohibit the rental of a residential dwelling for 7 consecutive days or longer. Any that currently prohibit could no longer do so upon passage of the budget.
  • However, a municipality or county may limit the total number of days within a year, but the total must be 180 consecutive days or more, with certain limitations.
Primitive Cabin Building Code Exemption
One motion seeming to take most all by surprise was an exemption from the state one and two family dwelling code, electrical wiring code, and plumping code for what is called a "Primitive Cabin" - defined as a structure that satisfies all of the following:
  • The structure is used as a sleeping place - not a home or residence
  • The structure is used principally for recreational activity
  • Excluding a basement, the structure does not exceed two stories in height
  • The structure was constructed before the budget bill is passed

While we are still looking into this, we were told by one source that it was requested by a legislator to exempt fishing cabins. We will advise when more information is available.

We are heading back into monitoring the Executive Session and will let members know further information in the next day or two.

As always, thank you for your support.



Contact: Trisha Pugal
Wisconsin Hotel & Lodging Association
pugal@wisconsinlodging.org
262/782-2851