Dear WH&LA Lodging Member:
With the changes in the State Budget relating to Short-Term Rentals in the State Room Tax Statute 66.0615, we wanted to get you an advance copy of the latest complete
WH&LA Wisconsin Room Tax Statute
that now incorporates the added components. This will be publicly shared by this Friday in the Room Tax section at our website (
).
Short-Term Rentals Clarification.
After verifying a recent new interpretation with legal counsel, we can share that
municipalities with a room tax should no longer need or likely even want to negotiate with Lodging Marketplaces
(i.e. Airbnb or HomeAway)
for them to collect and remit room tax for residential dwellings being rented out as "short-term rentals".
The change in statutory language in the budget provides the authorization for a Lodging Marketplace (which must be registered with the DOR) to collect and remit municipal room tax, which in turn submits them to similar requirements, disclosures, potential audits, as others remitting room tax payments. They are only required to collect and remit room tax for residential dwellings being rented out as short-term stays, however. The requirement does not include other types of rentals that may be rented through the Lodging Marketplace.
Why is this important? Most agreements Airbnb creates allows them to keep secret what properties are being rented out and the amount of sales revenue generated by each, which enables rentals that are not licensed or locally permitted to remain unknown. If a municipality avoids such an agreement, the Lodging Marketplace is simply subject to the same reporting requirements and potential auditing of records that other properties are subject to.
UW System Lodging Per Diem Cap
Not reiterated in yesterday's Budget Issues overview was a component from the State Budget that was approved by Joint Finance Committee at the end of May, and which was noted in the June 2 edition WH&LA Capitol Insider. Not long ago the UW System was authorized to set their own travel policies that enabled them to use the Federal Lodging Per Diem rates as their cap - which are higher than the current State Lodging Per Diem rates. The Joint Finance Committee felt strongly that UW System employees should not have higher reimbursement rates for lodging than other state employees, and so they set a new cap for the UW System Lodging Per Diem rate - stating it cannot be higher than the State Lodging Per Diem rate. It is uncertain if the State Lodging Per Diem Rate will be adjusted, and if so, when. The WH&LA continues to work on this through proper channels.
Best,
Trisha
