Small resorts seek to upgrade facilities with help of a sales tax exemption

Minnesotans of a certain age have fond memories of going to the lake when it didn’t mean a resort with a golf course, indoor swimming pool and a flat screen TV. It was to a so-called ma and pa resort with a few cabins on a good fishing lake.

But the number of these Minnesota icons is on the decline. Joel Carlson told the House Taxes Committee Thursday that the state loses about 24 of these small resorts a year. He represents the Congress of Minnesota Resorts and was there to support HF496, a bill sponsored by Rep. Bud Nornes (R-Fergus Falls) that would provide a sales tax break to help these owners upgrade their facilities. The bill was held over for possible inclusion in an omnibus tax bill.

“The owners live at their resort; provide the hospitality, sell you the bait,” Carlson said. But with rising lakeshore property values, it makes sense to sell if that amount becomes greater than the business it generates. Once the property is sold to a private interest, it never comes back, he said

The bill would provide a sales tax exemption for construction materials and supplies used for improving an existing structure at a resort or a private or public campground. According to a Department of Revenue analysis, there are 810 resorts in the state and an estimated 770 private and public campgrounds. The bill would mean $530,000 less coming into the General Fund annually.

The bill’s companion, SF678, sponsored by Sen. Bill Ingebrigtsen, awaits action in the Senate Taxes Committee.