Changes to Exempt B&Bs from Hotel Tax
A move to exempt bed & breakfasts and cottages from Washtenaw County’s 5% accommodations tax received initial approval at the July 11, 2012 meeting of the county board of commissioners. In a separate vote, the board set a public hearing for Aug. 1 to seek input on the proposed ordinance change. A final vote on the resolution is expected at the board’s Aug. 1 meeting.
In addition to exempting cottages and bed & breakfasts with less than 14 rooms, the change would also exempt individuals who occasionally lease out rooms. These types of establishments account for less than 1% of the total tax collected in Washtenaw County, according to a staff memo accompanying the resolution.
According to the county treasurer’s report to the Washtenaw County accommodation ordinance commission, in 2011 the county collected $3.99 million in accommodation taxes. The money is primarily distributed to the county’s two convention & visitors bureaus (CVBs) – in Ann Arbor ($2.69 million in 2011) and Ypsilanti ($898,563). The county treasurer retains 10% of the tax to cover collection and enforcement expenses.
The accommodation ordinance commission (AOC) approved the ordinance change at their June 5 meeting. A staff memo states that the AOC had recently reviewed enforcement and administrative costs, and did not believe it was cost effective to enforce the ordinance with these smaller establishments. The staff memo also states that the local CVBs support this change, in part because the CVBs do not actively market these establishments.
This brief was filed from the boardroom of the county administration building at 220 N. Main in Ann Arbor. A more detailed report will follow: [link]