ROOM TAX
Marshall Murdaugh's study, commissioned by the Door County Strategic Marketing Coalition, recommended a long-range strategic marketing plan for the Door County Visitors' Bureau (previously Chamber of Commerce). All communities have now followed implementation of a county-wide lodging tax that will raise the promotion income of the Visitors' Bureau to $2 million for better tourism promotion and operation.
The room tax percent is 5.5% - Sturgeon Bay was the only community in Door County with a room tax, at 4%.
There has been a Tourism Zone Commission formed to administer the room tax system and enforce as necessary. Our current representative is Craig "Nedd" Neddersen of the Eagle Harbor Inn, and we are seeking one more representative for the Commission.
Seventy percent of the room tax will go to the Door County Visitors' Bureau. Thirty percent of the tax collected in Ephraim will come back to the Village and it must be used for tourism-related services. It appears that Ephraim's portion may exceed $110,000 per year.
The Room Tax collection began as of May 1, 2007. Taxes are due to the Commission at the end of the next month (in that case, June 30), and the Village would see its first payment by the end of the next month (July), and so forth. The Board has passed a motion to give 50% of our portion of room tax back to the Ephraim Business Council for tourism promotion of our beautiful village, which amount will be re-evaluated at the end of each year for subsequent years.
It is our hope that the Door County Visitors Bureau will use the money wisely for their expanded promotional efforts, that the Village's money will go to a few new projects as well as funding current tourism infrastructure, and that the Ephraim Business Council will enjoy some expanded promotional opportunities!
Expenses currently paid solely by Ephraim property owners include:
--Principal and interest payments on loans for Harborside Park and its renovation, Hillside/Iverson shore parcels, roads construction - $124,723 in 2008
--Yearly capital reserve for fire equipment purchase in 2012 - $14,000 in 2008
Maintenance and upkeep of public restrooms, parks or the Hall may also qualify under the definition of "infrastructure expenses."
PREMIER RESORT TAX
This tax law was implemented to help Wisconsin Dells defray expenses for tourism infrastructure. The qualifying criteria: tourism business property must account for 40% of the overall valuation. The Village has been working since 1998 to receive an exemption from this percent and last year Governor Jim Doyle has signed into law an exemption for Ephraim and Sister Bay so that we can both qualify for implementation of the Premier Resort Tax.
The Finance Committee in Madison calculated that, based on 2005 sales in Ephraim, we would have received $100,000 for the year. Premier Resort Tax is a ½% sales tax on the sale, lease or rental of goods or services that are taxable under sales tax laws. Anyone now charging sales tax would add this ½% on to the 5.5% now being charged - i.e. a total of 6%.
Ninety-seven percent of a Premier tax is returned to the Village for infrastructure expenses. Premier Resort Tax remains an option for the Village in the future. A binding referendum and 2/3 vote of the Board would be required to allow this ½ percent tax to be put into action.
WHAT OTHER COMMUNITIES SAY
Both taxes are considered invaluable tools to provide the tourism community the amenities it needs, to attract a new and increased visitor base, and to alleviate the tax burden to local residents.
Bayfield has Premier Resort Tax in their tourist community. "Being a small community, we had massive problems paying for infrastructure, and the Premier Resort Tax has made a big difference. This is especially important because support from State and Federal governments continues to diminish." Bayfield also has a room tax of 6.5% (Carrie Obst, 1-800-447-6400)
Eagle River is just implementing their Premier Resort Tax – it passed referendum by a vote of four to one, and it will go into effect January 1, 2007. Of their 4.5% room tax, "We couldn't live without it. We would die on the vine without that income." (Conrad Heeg, Eagle River Chamber of Commerce, 1-800-359-6315).
