Cook County Assessor Robert (Bob) Thompson came before the county board on Tuesday, Sept. 10 with a memo the county was sent from the state’s assessor’s office concerning short-term rental classifications.
Thompson said Cook County has about 640 short-term rentals. The state is asking the county to decide which of them should fall under certain short-term rental classifications.
Not all short-term rentals are the same, said Thompson. There are four potential classifications: seasonal residential recreational non-commercial; seasonal residential recreational commercial (resort); residential non-homestead 1-3 units; and commercial/industrial/utility.
In order to gain the information needed to make initial assessments, the assessor’s office will send out a questionnaire asking owners of these rental units a variety of questions.
With the dramatic rise in Airbnb’s— more people today visit the Airbnb travel booking website than any hotel chain and at $31 billion, Arbnb’s market value is now higher than any hotel chain—both the state and federal government are trying to figure out which of these rentals are commercial businesses – based on the number of days used for personal use versus number of days rented — and whether they should be taxed differently than they are currently being taxed.
In 2008, a task force was assigned by the Minnesota legislature to study the state policy concerning vacation home rentals, with one suggested change coming from that committee for the state to adopt the IRS “Vacation Home Rentals” number of days criteria. However, the committee made no recommendation to the legislature about how to classify these properties for property tax purposes.
In judging what classification a short-term rental will fall under, the assessor’s office will look at how the property is used. Questions to owners will include: Does the property generate an income? How many rental units are there and what are the terms of the leases? How many days during the year are the units booked and what recreational opportunities are offered?
While the Minnesota Department of Revenue has provided examples of short-term rentals being classified as commercial, there hasn’t been a clear, statewide directive to counties on how to classify those rentals, said Thompson, adding that every property must be examined on a case-by-case basis.
If a commercial classification is made on a property, the tax implications could be significant, said Thompson. He worried that someone owning a resort for, say, 30 years, and was hit with a new property tax classification, that his or her property taxes could triple.
He also said that if the county goes ahead and reclassifies short-term rentals, without clear rulings from the state, the county could potentially end up in tax court 640 times.
For now, Thompson said any changes to short-term rental classifications are a year or two away. In the meantime, Bob, who is on a state committee studying the subject, said there is a lot of work to do, but as several county board members cautioned, for now, tread lightly.
• Commissioners accepted the resignation of maintenance worker Cheyenne McEntee effective September 19 and approved posting for the open custodian position. McEntee only recently started the position to clean the YMCA, and it’s a position that has seen a lot of turnover in the last year.
Administrator Jeff Cadwell told commissioners the second shift cleaning position was difficult for Brian Silence, the county maintenance director, to supervise. He suggested some changes including moving a second maintenance worker to the night shift, which would make it safer and presumably shorten the evening hours. Commissioners took his words under advisement.
• Daniel Berglund was promoted to a Maintenance Worker III position. He will fill the opening created by the resignation of Shawn Swearingen.
• Subordinate Governmental Service District (SGSD) contracts were awarded to Mike Rose Excavating for the Evergreen Road Association; LaBoda Grading for the Irish Creek Road SGSD; Greg Gecas for the Mile-O-Pine Road Association; Cory Christianson for the Voyageur’s Point Association; and W Labor LLC for the Rosebush HI and West Rosebush Lane Association.
• In a memo to the board, Auditor/ Treasurer Braidy Powers asked commissioners to extend the date to September 30, 2020 for Soil and Water to use up to $30,000 to locate 1,700 groundwater wells throughout the county to satisfy requirements of the County Geological Atlas program.
The county board approved the money from the Environmental Trust Fund on May 21, 2018. By extending the date, the Soil and Water Conservation District will be able to use those funds as a match for a state grant that will be available April-September 2020. The board passed the recommendation.
• The Sheriff ’s Office received three donations from the public. One was from Betsy Perry who gave various items to the Search and Rescue department as well as to the K9 program. Paul Olin donated a Vizio TV he hopes, “that it could be good use for the Cook County Search and Rescue training need.” Gerilynne (Geri) Heston made a donation of $50 to the K9 program, and thanked the sheriff ’s department for helping find her trusty steed, Sierra.
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