(A) Definitions. For the purpose of this section, the following definitions apply unless the context clearly indicates or requires a different meaning.
LODGER. The person obtaining lodging from an operator.
LODGING. The furnishing for a consideration of lodging by a hotel, motel, short term rental, or rooming house, except where the lodging shall be for a continuous period of 30 days or more to the same lodger(s). The furnishing of rooms by religious, educational, or non-profit organizations shall not constitute LODGING for purposes of this section.
OPERATOR. A person who provides a lodging to any person.
RENT. The total consideration valued in money charged for lodging whether paid in money or otherwise, but shall not include any charges for services rendered in connection with furnishing lodging other than the room charge itself.
(B) Imposition of tax. There is hereby imposed a tax of 3% on the rent charged by an operator for providing lodging to any person after 1-15-1988. The tax shall be stated and charged separately and shall be collected by the operator from the lodger. The tax collected by the operator shall be a debt owed by the operator to the city and shall be extinguished only by payment to the city. In no case shall the tax imposed by this section upon an operator exceed the amount of tax which the operator is authorized and required by this section to collect from a lodger.
(C) Collections. Each operator shall collect the tax imposed by this section at the tune the rent is paid. The tax collections shall be deemed to be held in trust by the operator for the city. The amount of tax shall be separately stated from the rent charged for the lodging and those persons paying the tax shall receive a receipt of payment from the operator.
(D) Exemptions. An exemption shall be granted to any person as to whom or whose occupancy it is beyond the power of the city to tax. No exemption shall be granted, except upon a claim therefor made at the time the rent is collected and a claim shall be made in writing and under penalty of perjury on forms provided by the City Clerk. All claims shall be forwarded to the City Clerk when the returns and collections are submitted as required by this section.
(E) Advertising no tax. It is unlawful for any operator to advertise or hold out or state to the public or any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent or that, if added, it or any part thereof will be refunded. In computing the tax to be collected, amounts of tax less than $0.01 shall be considered an additional cent.
(F) Payment and returns.
(1) The taxes imposed by this section shall be paid by the operator to the City Clerk monthly not later than 25 days after the end of the month in which the taxes were collected. At the time of payment, the operator shall submit a return upon the forms and containing information as the City Clerk may require. The return shall contain the following minimum information:
(a) The total amount of rent collected for lodging during the period covered by the return;
(b) The amount of tax required to be collected and due for the period;
(c) The signature of the person filing the return or that of his or her agent duly authorized in writing;
(d) The period covered by the return; and
(e) The amount of uncollectable rental charges subject to the lodging tax.
(2) The operator may offset against the taxes payable with respect to any reporting period, the amount of taxes imposed by this section previously paid as a result of any transaction the consideration for which became uncollectable during the reporting period, but only in proportion to the portion of the consideration which became uncollectable.
(G) Examination of return, adjustments, notices and demands. The City Clerk shall, after return is filed, examine the same and make any investigation or examination of the records and accounts of the person making the return deemed necessary for determining its correctness. The tax computed on the basis of the examination shall be the tax to be paid. If the tax due is found to be greater than that paid, the excess shall be paid to the City Clerk ten days after receipt of a notice thereof given either personally or sent by registered mail to the address shown on the return. If the tax paid is greater than the tax found to be due, the excess shall be refunded to the person who paid the tax to the City Clerk ten days after determination of the refund.
(H) Refunds. Any person may apply to the City Clerk for a refund of taxes paid for a prescribed period in excess of the amount legally due for that period; provided that, no application for refund shall be considered unless filed within one year after the tax was paid, or within one year from the filing of the return, whichever period is the longer. The City Clerk shall examine the claim and make and file written findings thereon denying or allowing the claim in whole or in part and shall mail a notice thereof by registered mail to the person at the address stated upon the return. If the claim is allowed in whole or in part, the City Clerk shall credit the amount of the allowance against any taxes due under this section from the claimant and the balance of the allowance, if any, shall be paid by the City Clerk to the claimant.
(I) Failure to file a return.
(1) If any operator required by this section to file a return shall fail to do so within the time prescribed, or shall make, willfully or otherwise, an incorrect, false or fraudulent return, the operator shall, upon written notice and demand, file the return or corrected return within five days of receipt of the written notice and shall, at the same time, pay any tax due on the basis thereof. If the person shall fail to file the return or corrected return, the City Clerk shall make a return or corrected return, for the person from the knowledge and information as the City Clerk can obtain, and assess a tax on the basis thereof, which tax (less any payments theretofore made on account of the tax for the taxable period covered by the return) shall be paid upon within five days of the receipt of written notice and demand for the payment. Any return or assessment made by the City Clerk shall be prima facie correct and valid, and the person shall have the burden of establishing its incorrectness or invalidity in any action or proceeding in respect thereto.
(2) If any portion of a tax imposed by this section, including penalties thereon, is not paid within 30 days after it is required to be paid, the City Attorney may institute such legal action as may be necessary to recover the amount due plus interest, penalties, the costs and disbursements of any action.
(3) Upon a showing of good cause, the City Clerk may grant an operator one 30-day extension of time within which to file a return and make payment of taxes as required by this section; provided that, interest during the period of extension shall be added to the taxes due at the rate of 10% per annum.
(J) Penalties.
(1) If any tax imposed by this section is not paid within the time herein specified for the payment, or any extension thereof, there shall be added thereto a specific penalty equal to 10% of the amount remaining unpaid.
(2) In case of any failure to make and file a return within the time prescribed by this section, unless it is shown that the failure is not due to willful neglect, there shall be added to the tax in addition to the 10% specific penalty provided in division (J)(1) above, 10% if the failure is for not more than 30 days with an additional 5% for each additional 30 days or fraction thereof during which the failure continues, not exceeding 25% in the aggregate. If the penalty as computed does not exceed $10, a minimum penalty of $10 shall be assessed. The amount so added to any tax shall be collected at the same time and the same manner and as a part of the tax unless the tax has been paid before the discovery of the negligence, in which case the amount so added shall be collected in the same manner as the tax.
(3) If any person willfully fails to file any return or make any payment required by this section, or willfully files a false or fraudulent return or willfully attempts in any manner to evade or defeat any such a tax or payment thereof, there shall also be imposed as a penalty an amount equal to 50% of any tax (less any amounts paid on the basis of the false or fraudulent return) found due for the period to which the return related. The penalty imposed by this division (J)(3) shall be collected as part of the tax, and shall be in addition to any other penalties provided by this section.
(4) All payments received shall be credited first to penalties, next to interest, and then to the tax due.
(5) The amount of tax not timely paid, together with any penalty provided by this section, shall bear interest at the maximum rate per annum as prescribed by M.S. § 270.0725, as it may be amended from time to time, from the time the tax should have been paid until paid. Any interest and penalty shall be added to the tax and be collected as part thereof.
(K) Administrator of tax. The City Clerk shall administer and enforce the assessment and collection of the taxes imposed by this section. The City Clerk shall cause to be prepared blank forms for the returns and other documents required by this section and shall distribute the same throughout the city and furnish them on application, but failure to receive or secure them shall not relieve any person from any obligation required of him or her under this section.
(L) Examine records. The City Clerk and those persons acting on behalf of the City Clerk authorized in writing by the City Clerk or the city may examine the books, papers and records of any operator in order to verify the accuracy of any return made or, if no return was made, to ascertain the tax as provided in this section. Every operator is directed and required to give to the person authorized to examine the books, papers and records, the means, facilities and opportunity for the examinations and investigations as are hereby authorized.
(M) Violations. It is unlawful for any person to willfully fail to make a return required by this section; or to fail to pay the tax after written demand for payment; or to fail to remit the taxes collected or any penalty or interest imposed by this section after written demand for the payment; or to refuse to permit the City Clerk or any duly authorized agents or employees to examine the books, records and papers under his or her control; or to willfully make any incomplete, false or fraudulent return.
(N) Use of proceeds. Five percent of the proceeds obtained from the collection of taxes pursuant to this section shall be paid to the City Clerk for costs of collection. Ninety-five percent of the proceeds obtained from the collection of taxes pursuant to this section shall be used in accordance with M.S. § 477A.018, as the same may be amended from time to time, to provide funding to Iron Trail Travel and Convention Bureau for the purpose of marketing and promoting the city as a tourist or convention center.
(O) Appeals.
(1) Any operator aggrieved by any notice, order or determination made by the City Clerk under this section may file a petition for review of such notice, order or determination detailing the operator’s reasons for contesting the notice, order or determination. The petition shall contain the name of the petitioner, the petitioner’s address and the location of the lodging subject to the order, notice or determination.
(2) The petition shall be filed with the City Clerk within ten days after the notice, order or determination for which review is sought has been mailed or served upon the person requesting review.
(3) Upon receipt of the petition, the City Clerk shall set a date and time for a meeting with the petitioner and shall give the petitioner at least five days’ prior written notice of the date, time and place of the meeting.
(4) At the meeting, the petitioner shall be given an opportunity to show cause why the notice, order or determination should be modified or withdrawn. If the meeting does not result in the matter being resolved to the satisfaction of the petitioner, the petitioner may appeal to the Council.
(5) A petitioner seeking to appeal a decision to the Council must file a written notice of appeal with the Council in care of the City Clerk, within ten days after the City Clerk’s decision following the meeting described in division (O)(4) above has been mailed to the petitioner. The matter will thereupon be placed on the Council agenda as soon as is practical. At least five days prior to the hearing before the Council, the City Clerk shall prepare and serve on the petitioner a memorandum of proposed findings of fact and conclusions of law. A copy of the memorandum shall be presented to the Council at the time of the appeal hearing. The Council shall then review the proposed findings of fact and conclusions to determine whether they are correct. Upon a determination by the Council that findings and conclusions are incorrect, the Council may modify, reverse or affirm the decision of the City Clerk based upon an application of this division (O) and the evidence presented.
(Am. Ord. passed 2-14-2023)