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    Lawsuits Between TC Tourism, Golden Swan Raise Questions About Short-Term Rental Assessments

    The issue of whether private vacation rentals in Michigan are beholden to the same tax levies as hotels, motels, and other lodgings in the state has been raised by litigation between Traverse City Tourism and short-term vacation rental coordinator Golden Swan Management. Michigan law authorizes convention and visitor bureaus (CVBs) to assess up to a 5 percent tax on local hotel bookings, which comprise most of Traverse City Tourism's yearly budget and are channeled into promotion and regional economic development. Businesses that collect the assessment are transient facilities, described as "a building or combination of buildings under common ownership, operation, or management that contains 10 or more rooms used in the business of providing dwelling, lodging, or sleeping to transient guests." Last May, Traverse City Tourism told Golden Swan that it was required to collect assessments on its rentals as it manages over 10 rooms. The company disputed that claim because its units are privately owned by different individuals and distributed across numerous locations, while no property meets the 10-or-more-units threshold. Michigan Rep. John Roth (R) then introduced legislation to allow CVBs to collect a 5 percent tax on short-term rentals, and Traverse City Tourism sued Golden Swan for damages, which spurred a countersuit. Although a court decision could soon determine whether or not the levy applies to private home rentals, the case raises the issue of how funds should be invested if and when rentals are uniformly assessed.

    The Ticker (Mich.) (11/04/22) Beth Milligan

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