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Local tourism efforts are mostly supported by hotel-motel taxes.
When Geoff Ladd, the director of the Abraham Lincoln Tourism Bureau
of Logan County, made his monthly presentation at the Logan County
finance committee meeting last month, he said that he'd been asked
by a new bed and breakfast owner if they need to collect tax for the
county on guest stays.
There has been a lot of discussion on this issue in the tourism
industry and at the state government level as the number of bed and
breakfasts and hunting lodges has increased in recent years. These
businesses commonly charge a package fee that includes meals and
sometimes activities, rather than a separated bill with a room fee.
Finance chairman Chuck Ruben said that he's heard of lodges
avoiding the accommodation fee by saying, "We're selling a hunt and
we let them stay here for free."
Ruben asked Ladd to see what the law had to say on the matter.
Ladd returned with information for the committee this month. He
said he looked into the county's ordinances, and "Section 3 leaves
things pretty open-ended for taxable entities."
He said that Illinois had passed a law that went into effect a
year ago, on Jan. 1, 2006. He had a copy of the law and a letter of
interpretation. The state is charging taxes on these entities, but
it is left up to the individual business how they would like to
assess the bill. They can charge a percentage of the entire proceeds
or separate the bill for taxable and nontaxable amounts.
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 The state then leaves it up to each county if they would charge a
tax as well.
In discussing the matter, the committee recognized that Logan
County actually has few of these businesses. Ruben did a rough
estimate on the annual return that might be expected from the
county's one hunting lodge. "At top end, we might expect $100 a
year," he said. He didn't think that the amount this tax would bring
in would be worth aggravating the current business owners, nor the
amount of paperwork it would take for the county to handle it.
Ladd said that he was just trying to get an answer for the
businesses that were asking. His concern was just if there was
already an ordinance that the businesses are supposed to be in
compliance with.
Ladd wanted to make sure that the local businesses know that,
while they will not need to collect a county tax, they do still need
to comply and collect a tax for the state. He observed from the
letter that there are serious penalties for businesses that do not
comply with the state law. Ruben recommended that the county send
forms and a copy of the state law and the letter to the local
businesses, so they don't get in trouble with the state.
[Jan
Youngquist]
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