Lodging Tax in Cook County

Visit Cook County is a Destination Marketing Organization (DMO) that represents the tourism tax jurisdiction of the Lutsen-Tofte Tourism Association (LTTA), Grand Marais Area Tourism Association (GMATA), Gunflint Trail Association (GTA) and voluntary contributing partners of Grand Portage and Lutsen Mountains.

A Destination Marketing Organization (DMO), also known as a Convention and Visitors Bureau (CVB), is a non-profit entity dedicated to promoting and marketing a destination's diverse offerings. This includes showcasing its attractions, accommodations, tourism services, and events to attract and inform potential visitors. By effectively promoting the destination, DMOs contribute to the growth and vitality of the local economy. Funding for DMOs typically comes from a combination of Lodging taxes, membership dues, improvement districts, and other financial resources.Visit Cook County's evolution from a Convention and Visitors Bureau (CVB) to a Destination Marketing Organization (DMO) reflects a broader shift in the tourism industry. Initially focused on attracting conventions and meetings, CVBs like the early Cook County Events & Visitors Bureau played a crucial role in showcasing the region's potential. However, recognizing the growing importance of leisure travel, the organization transitioned into Visit Cook County in 2010. This change signified a strategic move towards comprehensive destination marketing, encompassing not only conventions but also promoting the diverse experiences and attractions Cook County offers to all visitors. Today, Visit Cook County serves as a vital resource for travelers, fostering economic growth and enhancing the overall visitor experience in the region.

Visit Cook County is not affiliated with any government entity at the local, county, or state level. It operates as an independent 501(c)6 non-profit organization, which means it represents a group of individuals with a shared interest in promoting the region. While Visit Cook County works to advance the area's tourism industry, it is not a for-profit business and does not operate in the same manner as a typical commercial enterprise.

Visit Cook County receives funding primarily through Lodging taxes, consisting of both a 3% and 1% tax, paid by visitors staying in overnight accommodations. In addition to these Lodging taxes, the organization also secures funding from other sources not related to lodging, such as grants, contributions from partners, and revenue generated through membership sales.

Lodging tax, also known as stay tax, bed tax, or tourist tax, is a tax paid by visitors staying in overnight accommodations. In Cook County, Minnesota, Visit Cook County (VCC), a Destination Marketing Organization (DMO), uses these funds to promote tourism in the area. 

Lodging tax is collected by lodging entities from their guests and then remitted to the Cook County Auditor's Office. Learn more about how Cook County’s Auditor's office collects Lodging tax here. There are two types of Lodging taxes in Cook County: a 3% tax and a 1% tax. The 3% Lodging tax is mandated by Minnesota state statute and must primarily be used for marketing and promoting the destination. The additional 1% Lodging tax is specific to Cook County and was established through special legislation in 2008. Referred to as the "1% events tax," it has broader usage, supporting marketing, production of events, and programming within Cook County. 

Lodging tax plays a crucial role in sustaining Cook County's tourism industry, which is the primary driver of the local economy. The revenue generated from Lodging tax supports Visit Cook County’s marketing efforts, event production, and community investment initiatives. It enables the promotion of local attractions, accommodations, tourism services, and events, thereby attracting visitors and boosting the local economy.

Per Minnesota state statute, a maximum 3% Lodging tax may be imposed by local jurisdictions, with 95% of the revenue dedicated to marketing and promoting the area or convention center. In contrast, Cook County has an additional 1% Lodging tax, established through special legislation in 2008. This "1% events tax" has a broader purpose, supporting the marketing and production of various events and programs throughout Cook County. It's important to note that only the 1% Lodging tax requires renewal under the special legislation, while the 3% tax is a standard provision under state law.

Yes! Though enacted around the same time in our county, the local 1% sales tax was special legislation to support specific projects. Some of the projects include the Cook County YMCA, county-wide broadband (True North), improvements to Superior National Golf Course, the renovation of the Grand Marais Public Library, improvements to Birch Grove Community School and others.  The 1% sales tax is set to sunset in 2030, but the county board could choose to terminate it sooner if there is enough money saved to repay the bonds. The 1% Lodging tax is collected from visitors on overnight stays in lodging in Cook County, Minnesota.

The impact would be devastating to our community. While hard to quantify the exact impact to our community without a formal study, other destinations have cut funding and immediately saw a decline in visitation and brand awareness. In 1993, Colorado became the first state to eliminate its tourism marketing funding which resulted in annual revenue loss of over $2 billion a year and took until 2015, even though funding was reinstated in 2000, to fully recover market share.This would have a ripple effect on local businesses, impacting the entire community. Additionally, without dedicated funding for tourism marketing, Cook County would struggle to compete with other destinations for visitors

Tourism impacts the local community in many ways. Across the nation, rural communities are losing their healthcare services, local grocery stores are unable to sustain business and recreational amenities are closing as the population in rural areas decline. In Cook County, we have a strong healthcare system, six grocery stores and recreational businesses like Lutsen Mountains or educational not-for-profits like North House Folk School, that continue to grow and expand. The 2024 Tourism and Economy Fact sheet shows that of the 8 counties in Northeast Minnesota, Cook County ranks in leisure and hospitality Sales Tax collections which is nearly double the amount that is collected in neighboring Lake County.

Sales tax is only one of many metrics that can be used to demonstrate the importance of tourism dollars in our local economy. Many amenities enjoyed by residents are sustained by tourism dollars. From the influx of property tax dollars into the County budget (i.e. public health and human services, law enforcement, and road maintenance), to how Visit Cook County uses Lodging tax to invest in the community, to attractive dining options and live entertainment, “living like a local” would look very different if tourism was not our main industry.

Despite the recent surge in tourism, the need for Lodging tax remains crucial for the long-term sustainability of Cook County's tourism economy. Visit Cook County has been actively working to strengthen shoulder seasons (periods between peak seasons) to distribute tourism more evenly throughout the year.

Lodging tax revenue is essential for maintaining Visit Cook County's efforts to promote sustainable tourism practices, educating visitors on proper Leave no Trace etiquette and providing resources for wayfinding and local information. This investment ensures that Cook County remains a desirable destination for years to come, while mitigating the potential negative impacts of tourism.

Visit Cook County is governed by a Board of Directors composed of members from three tourism associations. Each association determines how the 1% Lodging tax revenue from their lodging district is allocated. The Board of Directors, with input from staff, marketing partners, and current tourism trends, oversees and guides the overall budget derived from the 3% tax.

Yes,  the county receives a portion of the Lodging tax revenue. Specifically, it retains 5% of the total Lodging tax collections to cover the administrative costs associated with collecting and processing the tax. This practice aligns with Minnesota state statutes, which allow county entities to retain up to 5% of Lodging tax revenue for administrative purposes.

The 1% sales tax was implemented in 2008 for a 15 year time period. In 2023, Visit Cook County collaborated with the Cook County Chamber of Commerce and other key stakeholders to present a renewal of the 1% Lodging tax for an additional 15 years. Visit Cook County worked with Senator Grant Hauschild and Representative Roger Skraba to introduce the bill to the legislature. We were successful with the renewal and the 1% collection will stay in place for another 15 years. 

Immediate and widespread loss of funding would have been felt throughout the county. Non-profit organizations that rely on this revenue to organize community events, as well as local musicians and artists who receive direct support through reimbursement programs, would be significantly impacted. Furthermore, the county's investment in its primary industry, tourism, would be substantially reduced, potentially hindering its growth and development.