HomeMy WebLinkAbout4.3a Q2 and Q3 Lodging Tax Revenue Memo
TO: Board of Directors, Cottage Grove Convention and Visitors Bureau
FROM: Jaime Mann, Assistant to the City Administrator
DATE: November 19, 2021
RE: 2021 Q2 and Q3 Lodging Tax Revenue
Background
Beginning May 1, 2020 all facilities and establishments within the City of Cottage Grove city limits
that are classified as a hotel, motel, rooming house, tourist court, or resort, other than the renting
or leasing of it for a continuous period of 30 days or more had to start imposing a 3% tax on the
gross receipts from the furnishing of lodging. The funds will be collected quarterly and used to
fund the Cottage Grove Convention and Visitors Bureau. The collections have a due date of thirty
days following the dates listed below:
1st Quarter - April 1st
2nd Quarter - July 1st
3rd Quarter - October 1st
4th Quarter - January 1st
Discussion
The Minnesota Association of Convention & Visitors Bureaus held their annual meeting October
5 and 6, 2021. At that time, Assistant Mann and Marketing and Communications Specialist
Prior-Miller learned that per MN Statute 13.495, data, other than basic taxpayer identification
data, collected from taxpayers under a lodging tax ordinance are nonpublic. This means we can
no longer release the names of the hotels as it relates to lodging tax revenue.
Due to the current COVID-19 pandemic and its effects on the lodging industry, the 2021 budget
used conservative monthly revenue estimates of $3,686 in lodging tax collections for the 2nd and
3rd quarters of 2021. This is based on a 40% occupancy rate and would equate to $11,058 in
lodging tax collections per quarter. The current revenue projections for the 4th quarter are
estimated to be the same $11,058. In July, the City of Cottage Grove collected the 2nd quarter
lodging tax and in October, the City of Cottage Grove collected the 3rd quarter lodging tax and
received the following amounts:
Table 1: 2nd and 3rd Quarter Lodging Tax Collections for the City of Cottage Grove
Q1 Q2 Q3 Q4 Total
Lodging Tax Revenue 9,468$ 15,075$ 19,680$ -$ 44,223$
Other Revenue -1,000$ -$ -$ 1,000$
2021 Total Revenue 9,468$ 16,075$ 19,680$ -$ 45,223$
2021 Budgeted 11,058$ 11,058$ 11,058$ 11,058$ 44,232$
Board of Directors, Cottage Grove Convention and Visitors Bureau
November 19, 2021
Page 2 of 2
The lodging tax collections for the 2nd quarter of 2021 were $15,075 from lodging tax revenue
and $1,000 from an Explore Minnesota Tourism Crisis Marketing Grant which is $5,017 over our
budgeted amount. The 3rd quarter of 2021 we received $19,680 in lodging tax revenue which is
$8,622 greater than our projection.
The 3rd quarter collections equate to an average of $6,560 per month. If revenue collections
were to remain at the same levels moving forward, they would also exceed the $3,686 per
month budgeted for the 4th quarter of 2021 by $2,874 per month. This would bring our total
revenue collected for 2021 to $64,903 which is $20,671 over our budgeted amount.
Recommendation
Receive the 2021 Q2 and Q3 budget update.