While today is the Partisan Primaries, an important day to vote and to watch the results that will deliver the final slate of Candidates in the November 6 Elections at the state and federal levels, we do have two other important updates to share with you today.

CARBON MONOXIDE(CO) DETECTOR REQUIREMENT CHANGES

At the end of April we had reported on the basics of the changes to our state regulations on CO Detectors, however we held off on clarifying some of the finer details until we could confirm the interpretations of the state Dept. of Safety and Professional Services (DSPS) on the language to avoid confusion.  

The August newsletter from the DSPS references the changes as follows:

"The legislature has modified Wisconsin Statute 101.149 as it relates to requirements for carbon monoxide detectors in sleeping places.  The department wishes to note the following changes:

• A "fuel-burning appliance" is now defined as a "device that burns fossil fuels or carbon-based fuel that produces carbon monoxide as a combustion by-product"

• A definition for "Unit" has been added which is "a part of a residential building that is occupied by one or more persons as a home, residence, or sleeping place"

• The location of carbon monoxide detectors has been rewritten to require them in the "immediate vicinity of the sleeping room" in a "Unit" that has a Fuel-burning appliance, Forced-air furnace (that is also a Fuel-burning appliance), or when a Fuel-burning appliance is located outside of the unit or there is an attached private garage unless an exception is met; and,

• The omissions of note include eliminating the dual requirement of wiring carbon monoxide detectors to the building's electrical service and providing batter secondary power in addition to eliminating the exception that allowed inspection of sealed combustion chamber appliances that are no longer under warranty in lieu of providing detectors."

In addition, this brief Guide was just released by the DSPS relating to " Carbon Monoxide Alarms "

SHORT-TERM-RENTALS UPDATE

Members may recall from a June 7th   WH&LA   Capitol Insider that we had provided an update on the status of the changes in the Short-Term-Rentals laws that were passed last fall, and how the component relating to the new requirement that "Lodging Marketplaces " (basically unrelated online platforms that rent short-term-rentals to the public and collect the money for the owner/operators - such as Airbnb, VRBO, HomeAway, etc.) must register with the DOR and collect/remit state, county, and local sales and room taxes for owners, faced a challenge with "nexus " laws (requiring the collector to have a physical presence in the state).  This resulted in only a handful of smaller, Wisconsin-based rental platforms registering and collecting and remitting the taxes, unfortunately with minimal impact on any level of government and on room tax collections.

In a landmark ruling in late June, the U.S. Supreme Court, in South Dakota v. Wayfair Inc, ruled 5-4 that "nexus " can no longer prevent states from requiring vendors without a physical presence in the state, to collect and remit taxes authorized by the state. This will have huge implications on numerous online retailers that will generate more tax revenues for states who have for years complained about the loss of sales tax revenues from online sales.

Important to the lodging and tourism industry in Wisconsin, is this should open the gates for requiring the large online rental platforms such as Airbnb, and now many other competitors, to collect and remit state and county sales tax and premier resort area and special district taxes (all already being collected just by Airbnb through a separate agreement they have with the state), but we believe also local room taxes.  What would this mean? Instead of each municipality seeing a need to contract with Airbnb to collect room tax, usually meaning they must agree to certain data non-disclosures, all of the major platforms (including Airbnb) would have to collect and remit local room tax on all of their sales AND they would have no special privileges with non-disclosures - they would have to report just like lodging properties do. This would generate considerably more room tax revenue for local tourism promotion, along with the licensing requirements for residential dwelling rentals made more clear in the law - both of which help to level the playing field with current lodging property rentals.

If you noticed the bold on the word "should " above, this is because we feel that in order for the platforms to take the changes seriously and register, we need the state DOR to issue a public clarification interpreting that this is indeed required. The DOR has already issued a statement that they will begin enforcing the general requirement for out of state retailers to collect and remit sales tax on October 1st.

A few weeks ago, the DOR issued a "Scope Statement " and called a public hearing July 25 on their ability to clarify through the rules process what the general rules relating to the collection of sales tax based on the recent Supreme Court ruling will be. Primarily they wish to clarify whether or not they will mirror certain limitations, such as that the out of state vendor must generate a minimum of $100,000 in sales in the state or 200 transactions.  It is likely they will adhere to this, but it must go through process. At this hearing, the WH&LA testified to the DOR on the importance of also clarifying the Lodging Marketplaces obligations and that this applies to local room tax, which is authorized by the state -  and not just state collected taxes. Immediately after the hearing and before written input was closed, we were supported by the League of Municipalities and the City of Madison in written testimony.

The good news is that the DOR Secretary agrees that they need to issue clarifications relating to online short-term rentals, however it will need to be after the rules on the general limitations are completed, which are more broad-based for all retailers, and which must be completed sometime in September.

Thus, the bottom line is we hope to see state-issued interpretations by the DOR this fall that have the potential to help level the playing field with short-term rentals and to generate more local tourism promotion revenue from room tax. We will update members when we have further details.

Thank you as always for your interest and support.

Best,

Trisha

Trisha A. Pugal, CAE 262-782-285 1