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Door County Tourism Zone Frequently Asked Questions

This guide is to provide information to permit holders with regards to general questions about the Tourism Zone Commission and Room Tax. 

 

WHAT IS THE ROOM TAX AND WHY WAS IT IMPLEMENTED?

TOURISM WORKS FOR US: The history of room tax in Door County…

Why and When…In May of 2007 the Door County Tourism Zone Commission was established out of the hard work from a group of concerned citizens. This grass roots effort by a group called "Door County Peninsula Strategic Marketing Coalition" fundraised and volunteered their time to raise money for a market study.  This idea did not originate with local government officials; it began with the very people who make their livelihood in the tourism and hospitality industry in Door County.  

What did the market study show? Door County needed a new revenue source to create and implement effective marking to stop losing tourism market share.  Membership dues simply were not enough to effectuate a modern marketing program.  For Door County to remain a sought-after destination, the only option was to generate money for a broad and unified marketing campaign. 

TOURISM WORKS FOR US:  Why is Destination Marketing important and why should ROOM TAX fund it?

While some visitors are drawn to Door County by its natural beauty and the region’s unique natural and historical attractions, other visitors need to hear why to visit and what they can do while they are here through marketing.  Room tax revenue provides the mechanism that ensures the ongoing funding for the marketing of Door County.   In the competitive marketplace where travelers have many options, Destination Marketing Funds allows Door County to be marketed and represented.  Individual businesses are responsible for marketing themselves, but Destination Marketing must create the interest in visitation before an individual business can effectively market itself.  

WHAT IS ROOM TAX AND WHO HAS TO PAY IT?

Room tax is a rental tax that is paid by the guest for short term rentals for a period of less than thirty (30) consecutive calendar days.  It is also known as use tax, transient occupancy tax (TOT), tourist tax, bed tax, or hotel tax. Room tax is authorized to be collected under Section §66.0615 of the Wisconsin State Statutes.  The current room tax rate in Door County is 8.0%.

Room tax is not a tax on the lodging provider.  Property owners and management companies must collect the tax from the guest on behalf of Door County.  Room Tax applies to rentals from any and all internet based rental services (lodging platforms / lodging marketplaces) in all of Door County and direct bookings.

By definition, to be in compliance with the room tax ordinances, you must collect room tax if your property conforms to the definition of transient lodging.

“Hotel or motel means a building, group of buildings or structure in which the public may obtain accommodations for a monetary consideration, including, without limitation, such establishments as inns, motels, hotels, tourist homes, private homes, bed and breakfast establishments, rooming houses, condominiums, summer camps, apartment homes, resort lodges and cabins, commercial indoor lodging facilities, campgrounds with A-frames, cabins or trailers and any other building or group of buildings available to the public(Door County Tourism Zone Commission Agreement)

In 2006, the Door County Strategic Marketing Coalition commissioned a study to determine alternatives and options to offset the decline in tourism in Door County. The consultant’s report recommended a substantial increase in the funding for marketing Door County as a tourism destination and recommended utilizing Room Tax to do so. All 19 Door County municipalities have adopted the room tax.

 

WHAT IS THE ROLE OF THE DOOR COUNTY TOURISM ZONE COMMISSION?

The Tourism Zone Commission is a government entity created by the Intergovernmental Agreement (State Statutes Section §66.0615) and must comply with the laws of the State affecting public entities including open meetings and open records.  The Commission is responsible for issuing the lodging permits, collecting the room tax, preparing and delivering all the required reports, contracting with a tourism entity (Destination Door County) for the purpose of marketing the destination, approving the marketing plan and reviewing the performance measurements.   The purpose of the Commission is to ensure that the room tax funds collected increase tourism in member municipalities as measured by increased stays in lodging establishments.

 

HOW DOES THE DOOR COUNTY TOURISM ZONE COMMISSION OPERATE?

The Tourism Zone has retained the services of a local CPA firm to handle all room tax payments.  The accounting firm handles all of the reporting to assist in maintaining the confidentiality of the reports.  The Tourism Zone issues permits, tracks compliance and conducts enforcement.

The Tourism Zone has its financial transactions audited at the end of each fiscal year. The Tourism Zone meets regularly to review general collection information and performance reports from the Destination Door County.

The Tourism Zone reports regularly to its member municipalities on the activities undertaken, funds expended, and the status of its goals. With the exception of any closed session on any given agenda, Tourism Zone meetings are open to the public; dates and meeting places of upcoming meetings are posted on the Tourism Zone website.

WHERE DO THE ROOM TAX DOLLARS GO?

 

 

Room tax is a pass-through tax. The tax is charged directly to the lodger and remitted by the lodging provider.  All room tax dollars are paid to the Tourism Zone Commission. The Intergovernmental Agreement that was part of the adoption of the tax split the total tax into the following monthly distribution of the room tax collections:

70% is directed to the contracted entity to use for marketing Door County and increasing overnight stays.

30% goes back to the municipalities in which it was collected for any use deemed necessary by that community’s governmental body.

Municipalities make a contribution to the DCTZC proportionate to their revenue percentage to cover administrative costs of the tax collection, distribution, and enforcement. 

The Commission has contracted with the Destination Door County to develop and undertake a variety of marketing efforts designed to increase the number of overnight stays in lodging establishments in member municipalities.

 

TOURISM WORKS FOR USEffect on Local Government Revenues

Beyond the 30% that is distributed back to municipalities and the Strategic Community Partnership (SCP) funds allocated out of the DCVB distribution, tourism benefits local municipalities in many other ways.  Local government tax receipts increase when tourism and employment increase. Destination Door County has also partnered with the Door County Tourism Zone to make tourism infrastructure grants available in the same amount that is contributed to the Commission's operations.

 

WHAT ARE THE DUTIES OF A TOURISM ZONE PERMIT HOLDER?

As the operator of a lodging establishment you have the following responsibilities:

  1. Register your property for the Tourism Zone Lodging Permit – the criteria for a permit and regular reporting is offering rental, not actual rentals.
  2. Fulfill the other requirements as stipulated by WI STAT. 66.0615 (WI Seller’s Permit, if booking outside of Marketplace Platforms & DTACP Tourist Rooming License.)
  3. Collect room tax from each guest and hold in trust until remitted, if booking outside of marketplace platforms.
  4. File monthly room tax reports (with all required data) and remit room tax. 
  5. Preserve all records.

WHEN DOES MY PROPERTY NEED TO BE PERMITTED?

Your property needs to be permitted prior to the commencement of business. The Tourism Zone considers the commencement of business to be any and all advertising, social media, business associations or word of mouth advertising for your property.

WHAT HAPPENS IF I DON’T PERMIT MY PROPERTY?

It is in your best interest to permit your property as soon as possible. You are responsible for room tax payments as of the date you began renting, even if you were not permitted or collecting the tax.

The ordinance allows for:

Penalty for Non-compliance: Any party in violation of the ORDINANCE FOR THE COLLECTION OF TAX ON OVERNIGHT LODGING by failing to obtain and maintain a lodging permit, when such permit is required, shall be subject to a forfeiture of not less than twenty dollars ($20.00) nor more than one hundred dollars ($100.00) for each violation. Each room or unit separately rented or offered for rent and each day of such rental or offer for rental of such unit shall be a separate violation. In addition, injunctive relief is hereby authorized to discontinue violation of the aforementioned Ordinance. Any party deemed to have violated the Ordinance shall be obligated to pay the costs of prosecution, in addition to actual attorney fees expended in the enforcement of the Ordinance.” (Door County Tourism Zone Commission Agreement)

IF I AM LATE WITH MY REPORTING WHAT ACTIONS DOES THE TOURISM ZONE TAKE?

The Tourism Zone will send a property owner three notices to file and remit room tax. The final notice will contain a final deadline.  Should the room tax not be paid by the final deadline outlined in the final notice, the matter will be turned over to legal counsel.  All costs pertaining to efforts to compel a property owner to remit the room tax that a property owner holds in trust will be billed back to the property owner.

HOW DO I KNOW MY INFORMATION WILL BE KEPT CONFIDENTIAL?

The data we are asking you to provide in terms of occupancy rates and lodging sales is essential to know if the marketing efforts of the Destination Door County are working. We will keep your information confidential.   State Statute Section §66.0615(3) mandates the confidentiality of all room tax information and provides for civil forfeitures if confidentiality is broken.

The Commission and its committees discuss individual lodging properties by name only in Closed Session. Lodging property individual collections and statistics are not included in the Door County Tourism Zone Commission reports.

 

MY MARKETPLACE PROVIDER APPEARS TO BE COLLECTING AND REMITTING TAXES, DO I NEED A PERMIT AND AM I REQUIRED TO FILE MONTHLY ROOM TAX REPORTS?

Yes, you are still required to be permitted and submit monthly room tax reporting for each of your permitted operating months.  2019 WIS ACT 10 was passed in July 2019: A marketplace provider (lodging platform) is required to collect and remit sales and local municipal room taxes for all sales of taxable products and services in Wisconsin that the marketplace provider facilitates on behalf of a marketplace seller.  The law went into effect on January 1, 2020.

  • Just because the state law was implemented as of January 1, 2020, hosts cannot assume that Marketplace Providers are collecting and remitting taxes. In many instances there has been delayed or lapses in programming for the collection of local municipal room tax.  
  • It is your personal responsibility to determine how the Marketplace Provider(s) you are working with are handling their compliance with 2019 WI ACT 10 and the collection of local municipal room tax.
  • If you use a company such as Evolve or Avalara, it is your responsibility to determine how taxes are being handled and report accordingly.

Room Tax Reporting and Marketplace Payments of Room tax on your behalf: The municipal room tax reporting requirements remain unchanged. Permit Holders are required to report for each of your permitted operating months (and any additional rentals outside your permitted months).

The Door County Tourism Zone will require permit holders who utilize marketplace providers that collect room tax, to report how much room tax was paid on your behalf.  The information in SECTION 7/ Section 5 online, of the new report form is necessary because we may receive one bulk check for properties that utilize these services. 

The Tourism Zone is not given information as to which property is being paid on.  The online companies tell us that it is confidential information between the owner and the platform, therefore, they will not supply any information along with bulk payments.   

                                                  

Required information in the monthly room tax report provides the Tourism Zone with the information necessary to ensure that your room tax will be distributed back to the municipality in which it was collected per State Statute. Failure to provide payment information will deem room tax delinquent and late fees and interest will be assessed.      

WILL MY RETURNS BE CHECKED?

Yes.  The Tourism Zone will audit records to determine if the proper amount of tax has been calculated and remitted.  Your records are to be open to inspection by the Tourism Zone, or designated representative, at all reasonable times.  Please note, nontaxable (exempt lodging revenue) rent received must also be reported on the return and claimed as an exemption/exempt lodging sale on the room tax report along with the required documentation.

DO I NEED TO KEEP RECORDS?

Each operator is required to keep all records as may be necessary to determine the amount of the tax the operator was required to collect and pay to the Tourism Zone.  All records related to the room tax are subject to audit per WI State 66.0615(2)(a).  Records that should be kept include but are not limited to:

  • A register of guests showing the length of stay in terms of consecutive days, for each guest;
  • Guest or rent invoices, statements, contracts or bills, rent payments and/or refunds ??   these records should clearly show the length of stay;  
  • Room rate sheets or cards of prices per day of each room;  
  • Income tax returns, transient occupancy tax returns along with exemption certificates, and worksheets used to prepare tax returns;  
  • Bank statements, deposit receipts, and day books (note:  it is recommended that you maintain a separate bank account for your rental property);
  • Journals, general ledgers, or any other records, plus the detailed records from which the data was accumulated.  

I HAVE A NEIGHBOR THAT IS RENTING HIS/HER RESIDENCE AS A SHORT?TERM RENTAL.  I DON’T THINK THEY ARE COLLECTING/REMITTING ROOM TAX.  WHAT CAN I DO?

Contact the Tourism Zone via Email at [email protected] and provide us the address. We can confirm whether or not the property is permitted.  If it is not, the office will proceed with compliance efforts.

I AM NO LONGER RENTING MY PROPERTY, WHAT DO I DO?

  1. A permit holder must complete a permit deactivation form located on www.doorcountytourismzone.com under “forms”.
  2. In order for a permit to be deactivated, the deactivation form must be completed and returned to the office by mail or email.

 

What would happen if a municipality were not a member of the Tourism Zone?

The Door County Visitor Bureau could not market and or promote businesses in communities that are not members of the Door County Tourism Zone Commission as it would be a violation of the state statute enabling the local room tax ordinances.

When travel writers come to Door County or marketing efforts are coordinated all of Door County needs to be showcased.  Marketing efforts must communicate a unified brand.  That does not work if there is an “outside the Zone, inside the Zone” terminology.  Individually there is no way lodging providers can make the impact that we can make as a united front through Destination Marketing.

 

Tourism Contributions

Visitor Spending– Direct visitor spending in Door County totaled $304.2 million in 2020.

  • Tourism had an overall impact of $396.9 million on Door County's economy in 2020.

Jobs - Tourism is the number one economic driver in Door County.  The tourism industry in Door County supported a total of 2,743 jobs in 2020.  The total labor income of $80.4 million was generated for employees in Door County last year because of tourism spending. 

Tax Revenue – Tourism in Door County generated $32.5 million in state and local taxes in 2020.

TOURISM WORKS FOR US: Door County’s Tourism Industry

Every county directly benefits from tourism whether they are more rural or centralized to tourist activity.  Exports, the purchase of products by those who don’t live where the product is made, are an important and valued component in any economy.  The Door County Tourism Industry is an exporter, with the buyers living elsewhere and purchasing the Door County product.

Destination marketing campaigns create a “halo effect,” lifting not only visitor- ship, but driving business development, real estate sales, and the purchase of second homes.

 

 

WHAT DOES ROOM TAX DO FOR US?

Door County is recognized on a regular basis as a wonderful place to visit.  As with any consumer product or service, destinations must be marketed to obtain awareness and consideration within the mindset of potential visitors.  In order to compete we have to offer more: The vacation traveler needs to know what they can do once they arrive.  Destination Marketing is essential to attracting visitors and protecting Door County’s Tourism Economy. We need to remember the vital role visitors play in strengthening our local economy.  Visitors are brought here through marketing that is paid for by room tax. Door County could not support all the unique restaurants shopping, galleries, arts, and other unique aspects of Door County lifestyle without the dollars from tourists.  Tourism, like any other industry, brings money into the community, employs people, and supports municipalities with tax revenue.

 

 

 HOW DO I GET MORE ASSISTANCE?

      The Tourism Zone Commission office is available to assist you.  Please contact the office at: [email protected]