SUPERIOR — City officials are considering undoing an ordinance adopted in June 2022.
The Superior License and Fees Committee voted Monday, May 8 to repeal a requirement to license short-term rentals marketed for fewer than 30 consecutive days to tourists or transient visitors to the city.
The repeal, if approved by the city council, would mean that city license requirements for short-term rentals would be eliminated before they would go into effect July 1.
When the idea of licensing short-term rentals was initially brought to the committee last year, the goal was to ensure that room taxes were being collected; that the finance department had a model to reconcile collections; and to ensure short-term rentals were inspected and up to code, said Councilor Brent Fennessey, committee chairman.
“Where it kind of blew up was in this committee trying to figure out the application process,” Fennessey said.
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After the ordinance was adopted by the city council in June 2022, the license and fees committee started to work through the process of developing the application.
It was only then that officials discovered there is no legal avenue for the city to inspect the properties because state statute doesn’t allow for it, Fennessey said. The city also receives room taxes if the owner of a short-term rental relies on a marketplace such as Airbnb and VRBO, he said. Both are true whether the city has a license in place or not.
“We didn’t hear about this particular ordinance until attending the meeting in November,” said Bruce Barron, an owner of short-term rentals in Superior. He is a founding member of Superior Douglas County Hospitality Group, a 135-member group developed to keep owners informed about issues affecting short-term rental owners.
Back in 2017, Barron said the Wisconsin Legislature clearly defined the taxation, the reporting, the auditing and the business aspects in state law. That law made it clear that if a marketplace provider like Airbnb was going to do business in Wisconsin, it would be required to collect every nickel of tax required and distribute it to the right entity, he said. Additional information they are required to provide includes the number of nights sold in a community by the marketplace.
“We agree to accept Airbnb’s customer as our guest — we can refuse that — and Airbnb pays us rent,” Barron said. “So the confusion that seemed to be around this room and seemed to surround some of the practices seemed to be whether a rental property was a hotel. The state of Wisconsin figured that out long ago, and it wasn’t reflected in what was going on here.”
Property owners aren’t responsible for collecting or disbursing taxes even if Airbnb doesn’t pay them, he said.
“There is no need to license short-term rentals if taxation was the goal,” said Frog Prell, city attorney.
The reporting requirements are already handled by the marketplace providers, Prell said. The only reason someone who provides short-term rentals would need to do any additional reporting is if they were to provide transient rentals without a marketplace provider.
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Prell said he also doesn’t believe municipalities have the authority to inspect short-term rental properties.
Licensing of short-term rentals is handled by the county as an agent of the state, and the county health department does a substantial inspection, Barron said. If city officials want to ensure that only licensed properties are operating in the city, he said they should work with the county to ensure the marketplace provider is aware of the requirement.
“We believe that all people, all individuals or companies … that operate an Airbnb, a short-term rental in the city or the county, should be licensed in order to do business in the city or the county,” Barron said. “And they should be fully inspected because a visitor into town should expect that certain standards are met.”
The committee voted unanimously to repeal the section of the ordinance requiring short-term rentals to have a city license. The council will consider the repeal Tuesday, May 16.
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