Because tourism is such an integral part of Forest County and its economic makeup, the Forest County Tourism Commission has put together a series of articles to explain room tax: why it exists, its purpose, and its affect on the county. The Commission’s mission statement is simple: To promote tourism in Forest County. As you read the series, it is the Commission’s hope that citizens will understand the room tax process and the difference it can make in our community.
Forest County Room Tax: Making a Difference in Our Community
Part 1: An Overview
What is a room tax?
Under Wisconsin law, municipalities may impose a (room) tax on short-term lodging entities such as hotels, motels, inns, bed & breakfasts and other establishments that rent lodging for periods of less than one month. The tax rate can be set from 0 – 8%, with limited exceptions. The intent of the room tax is to provide funding for tourism marketing and promotions, such as brochures and information services in an effort to increase economic impact on communities.
How prevalent is room tax?
Room tax is not unique to Forest County. Whether at the state, county, or city level, room tax is collected in 48 of the 50 states as well as in the District of Columbia. (Source: 2012 U.S. Lodging Tax Study) And according to the Wisconsin Department of Revenue Auditor of State and Local Finance, there are approximately 280 communities that currently collect room tax.
How much is room tax?
The current rate for Forest County room tax is 4.5%, which is paid by the lodging guest and collected by the lodging facility.
Who pays the tax and where does the revenue go?
The lodging property adds the room tax to the customer’s bill when the customer pays for lodging. (Room tax is charged in addition to state sales tax.) Collected room tax revenue is forwarded to the municipality (township, city, etc.) by each lodging property, in accordance with the schedule set by local ordinance and in accordance with Wisconsin statutes.
What can room tax revenue be spent on?
State law requires that at least 70% of room tax revenue must be spent on tourism promotion and development. In simplified language, the portion designated for tourism promotion and development must be spent on marketing projects to attract tourists, tourist informational services, or municipal development significantly used by tourists. The rest of the revenue remains with the participating community.
Who makes the decisions on what is funded by room tax revenue?
Expenditure decisions are made locally within the parameters provided by state law under section 66.0615 of the Wisconsin statutes. A municipality that imposes a room tax may create a commission, defined as an entity “to coordinate tourism promotion and tourism development.” [s. 66.0615 (1) (a), Stats.] If two or more municipalities in a zone impose a room tax (which is the case in Forest County), they must create a commission who then must contract with an organization that performs the functions of a tourism entity.
What public accountability is required?
The commission is required to report at least annually to the municipality on how room tax revenue was spent on tourism promotion and development. Whether a commission or the municipality directly expends the room tax revenue, the record of these expenditures is subject to Wisconsin’s “Open Records Law.” This means that any local tourism business, the general public, or any media interested in learning how the room tax revenue is spent may request and receive this record from the municipality. Municipalities now have to report to the Wisconsin Department how funds are being spent.
Sources: Wisconsin Hotel & Lodging Association, University of Wisconsin Extension
The Room Tax Reality: Dollars & Sense
Part 2: Meet the Tourism Commission
This second article in the series will offer an overview of a Commission’s structure, and delve into what it does.
Comprised of area municipalities (townships, cities, etc.), the Forest County Tourism Commission was created in 2005 in order to coordinate tourism promotion and development using room tax dollars. However, actual collections didn’t begin until 2007. It’s important to note again that these dollars are paid by tourists, collected by lodging facilities, and remitted to the appropriate municipality.
The following are pertinent definitions as well as an overview of the guidelines the Commission must follow:
Tourism Commission for a Tourism Zone
- Definition of Commission: an entity created by two area municipalities in a zone to coordinate tourism promotion and tourism development for the zone.
- Definition of Zone: According to Wisconsin statute 66.0615, a zone is an area made up of two or more municipalities that is a single destination as perceived by the traveling public.
State guidelines for creating and maintaining a Commission:
- Commission shall be composed of one member from each municipality appointed by the principal elected official in the municipality.
- Commission shall include two lodging industry representatives appointed by the chairperson of the commission.
- It shall meet regularly and from among its members elect a chairperson, vice chairperson and secretary.
- It shall contract with a tourism entity in the zone to obtain staff, support services and assistance in developing and implementing programs to promote the zone to visitors.
- It shall use the room tax revenue it receives from a municipality for tourism promotion and tourism development (as defined by the state) in the zone.
- It shall monitor the collection of room taxes from each municipality in the zone.
- It shall report any delinquencies or inaccurate reporting to the municipality that is due the tax.
(Source: Wisconsin Hotel & Lodging Association)
Having laid out the foundation, let’s meet the Commission: Chair – Mike Gruett; Vice Chair – Winda Collins (Forest County Chamber Tourism Council); Secretary – Melinda Otto (Forest County Chamber of Commerce); Members – Bucky Dailey (City of Crandon); Lynn Black (Lincoln Township), Denise Smith (Laona Township, Camp 20 Cabins); and Mark Ferris (Hiles Township, Little Pine Motel).
The Commission meets nearly monthly throughout most of the year. Its purpose is to oversee and disburse the room tax collected from these participating Forest County municipalities: City of Crandon, Town of Hiles, Town of Laona, Town of Lincoln, Town of Wabeno. *A representative from Wabeno has not yet been named to the board.
The commission funds many events and tourism efforts, encouraging overnight stays to provide a perpetual funding model. They also provide annual support for the official Forest County Visitors Guide to keep advertising costs affordable for all area businesses.
Parts 1 and 2 have given an overview of room tax and the Commission. Please watch for Part 3 in the series: How Room Tax Helps Tourism.
Room Tax in Action: It’s All About the Numbers
Part 3: Making an Impact
In parts 1 and 2 of this series, an overview of room tax was given as well as an introduction to the Forest County Tourism Commission (FCTC). Part 3 will now delve into the numbers.
To date, over $288,000 has been invested in area tourism efforts through room tax dollars. Over $120,000 supported a variety of major projects and events, including grants for event promotion, television program spots, participation in regional promotional efforts, website, signage projects, recreational trails support, visitor guide support, sport shows, and tourism conferences. Approximately $110,000 went for direct support of the visitor center costs and additional staffing, as well as for administration of room tax processes. The remaining 20 percent was split between support of the visitor center building, and discretionary projects that support tourism in the county.
One of the long-range goals of FCTC is to install kiosks in each township, a designated space where those traveling through our county can easily and readily find information on what to do and see while here. FCTC is happy to report that one Forest County Township has jumped on the bandwagon. More detail on this effort will be given in part 4 of the series.
Another project in the works, and one that will be ongoing for some time is way finder signage across the county. Armstrong Creek was the pilot for this effort and is now complete. The need for signage to schools, courthouses, attractions, etc. is vital for those not familiar with our area. Once done, this project will tie all county townships together making our communities more visitor-friendly. Although FCTC is in no way financially linked to this effort, room tax dollars retained by participating municipalities, which to date totals more than $124,000, could use them to fund these types of ventures.
As FCTC’s mission is to promote tourism in Forest County, it offers grant opportunities for those events and ideas that entice and encourage guests to stay overnight. The simple truth is that more overnight stays = more room tax collected = more financial support for tourism promotion: the perfect perpetual model, and a win for all involved. Contact the Forest County Chamber of Commerce at (715) 478-3450 for information on grant opportunities.
FCTC continues to work hard on promoting tourism in our community. By collaborating and partnering with other organizations and municipalities, our communities will not only become better tourism destinations, they will become better places for us to live, work and play.
Stay tuned for Room Tax: Dollars in Action, Part 4: From Dream to Reality in the next issue.
Room Tax at Work: Forward Progress
Part 4: From Dream to Reality
In Parts 1, 2, and 3 of this series the reader was given: An overview of the who, what, why and how of the room tax process; an introduction to the Forest County Tourism Commission (FCTC) as well as its mission and responsibilities; and a view into the impact room tax dollars can and has had in our community. Part 4 will highlight a true success story.
The FCTC began discussions on creating visitor kiosks throughout the county almost two years ago. It visited the topic on different occasions without real action, but kept the conversation alive, knowing that the kiosks were needed. FCTC has viewed the kiosk as part of a ‘big picture’ for Forest County by way of helping to create a welcoming image for visitors to our area. It ties in with the ‘directional signs’ and all of the various efforts we make to welcome people.
In the initial discussions on the kiosk idea, FCTC viewed Hiles as a good beginning point with the project. This made a lot of sense for a couple of reasons: Hiles is at the north end of the county, and for many people coming from Three Lakes and north, it is the first community they see in Forest County. The real impetus to get the project moving came when a few events occurred this past fall. In September 2015, the Hiles Town Board approved the formation of the Hiles Planning Committee. The committee began meeting in late October and developed its mission statement. Much time was spent discussing the statement and resulted in the following:
“The Town of Hiles Planning Committee serves as an appointed committee of the Town Board. Its responsibilities are to include identifying and making recommendations to the Town Board that aim to enhance the experience of visitors and residents of the community.”
In the committee’s initial meetings, a visitor kiosk was identified as a priority. Knowing that the FCTC wanted to see a kiosk built and with Hiles being a prime location, the FCTC approved funds for the first county kiosk. The committee determined that the kiosk would include not only visitor information such as maps, brochures, etc., but also helpful information for local/seasonal residents. The Town Board approved acceptance of the kiosk from the FCTC.
The design for the kiosk was based on a prototype used in another Wisconsin county. The next step was to determine how and who would build the kiosk. In early 2016, Dr. Doug Kryder, Crandon district administrator, indicated the trades class at the high school would love to do the project as a building experience. Willy Krause and his students took charge of the project this spring. Collaboration between the Town of Hiles, school administration, teacher, students, and the FCTC will result in the kiosk being in place before Memorial Day weekend. Members of the Planning Committee and the Town Board and town crew are finalizing plans for placement of the kiosk, landscaping and inclusions in the kiosk.
Hiles has been a significant contributor in terms of room tax dollars collected. This fact has not gone unnoticed: It has consistently been the second highest contributor, following the City of Crandon, in room tax collections. Since joining the room tax ‘team’ in 2009, Hiles has collected over $51,000, retaining approximately $4,000 (or 30%) in 2015 alone. Collection numbers are expected to increase in 2016.
The town is home to many seasonal residents with homes on Pine, Franklin, Butternut, and Kentuck Lakes. The lakes, trails, and natural beauty attract thousands of visitors annually and their impact on the area is highly recognized. The slogan, ‘Before you can have a great place to visit, you must have a great place to live’ is a philosophy that the Planning Committee has adhered to in identifying enhancement ideas for Hiles.
More positive steps are in store for Hiles residents and visitors. It is anticipated that it will be one of the first communities to receive upgraded broadband services in 2016. The town will also be installing new directional way finder signs and a new ‘Welcome to Hiles’ sign. Hiles also has high hopes in the way of positive economic impact in its community once the highly anticipated Wolf River Nicolet Scenic Byway is designated in late 2016. The collaborative efforts of the various entities and the utilization of room tax funds have created a new dynamic for both residents of and visitors to Hiles.
Room Tax Works for Forest County: One Step Forward
Part 5: Collaboration is Key
This is the fifth and final article in the room tax series. The first four covered all the basics: the reason room tax exists, who pays it, who collects it, who retains a portion of it, who oversees how it can be spent; how the numbers can and do make an impact, and finally, an honest-to-goodness success story stemming from room tax.
The Town of Hiles will be cutting the ribbon on a brand new kiosk to welcome visitors at a ceremony this week. The Hiles Planning Committee not only developed the plan for the kiosk, they have been diligently working on an overall plan, including wayfinder signage and an improved welcome sign. The great news is that the Forest County Tourism Commission sponsored the cost of the kiosk through room tax dollars. Additionally, the Town of Hiles was able to pay for the signage costs with the percentage (30%) of room tax dollars retained by the town.
Hiles Planning Committee members sought out several collaborations during the process, with the first being the Forest County Tourism Commission on the kiosk. The committee reached out to Crandon School District Administrator, Dr. Doug Kryder, to get the ball rolling on constructing the kiosk. Trades instructor Willy Krause and students willingly took on the project.
The committee also worked with Forest County Economic Development Partnership, Forest County Chamber of Commerce, and K2 Pro Signs on the signage project plans and permitting. With cooperation from the Hiles Town Board and others, the projects are now all becoming a reality; all through dollars paid by visitors to the area.
If there were to be a moral to this story it would be that communities that work together can accomplish great things, one step forward at a time.