Duluth, MN Hotels & Lodging: Transient Occupancy Tax (2026)
Key Facts
- Tax rate
- 2.5% of gross lodging receipts
- Applies to
- hotels/motels with more than 30 rental units
- Stay length covered
- lodging rented for less than 30 days
- Late-payment interest
- 18% per year until paid
- Willful evasion penalty
- misdemeanor, fine or up to 90 days jail
- Revenue use
- tourism promotion, DECC, Spirit Mountain, park bonds
Summary
The City of Duluth adds a 2.5 percent tax on top of the citywide lodging tax on gross receipts from renting rooms for less than 30 days, but only at hotels and motels with more than 30 rental units. Smaller properties fall outside this extra levy. Collections follow the same procedure as the general lodging tax under the city charter.
(a) If any tax imposed by this Chapter or by Section 54(d) of the Duluth City Charter or any portion of such tax is not paid within the time specified for the payment, or an extension thereof, or within 30 days after final determination of an appeal to the board of review relating thereto, there shall be added thereto a specific penalty, which amount shall be set in accordance with Section 31-8 of this Code, of the amount remaining unpaid ... The amount of tax not timely paid, together with any penalty provided by this Section, shall bear interest at the rate of 18 percent per annum from the time such tax should have been paid until paid. ... In addition to any taxes set forth in the Duluth City Charter or Article I of this Chapter, and not withstanding any provision of law to the contrary, an additional tax of 2-1/2 percent is hereby imposed upon the gross receipts derived from the furnishing of lodging for less than 30 days at any hotel or motel having more than 30 units for rental to transients.
Full Breakdown
5 percent tax onto gross receipts from furnishing lodging for stays under 30 days, but the tax only reaches hotels and motels with more than 30 rental units available to transients; a bed-and-breakfast or small motel under that threshold does not owe this particular city levy. The tax is collected the same way as the base lodging tax set out in Section 54(d) of the Duluth City Charter. Revenue is not general fund money: under Section 42A-50, one percent of collections pays for activities that promote tourism in the city and subsidizes the Duluth Entertainment Convention Center and the Spirit Mountain recreation area, another one percent funds tourist-related public improvements, and a half percent services debt on three bond issues, $8,000,000 for DECC capital improvements, $4,970,000 for the Great Lakes Aquarium, and $36,000,000 for park-based public athletic facilities supporting sports tourism.
The city council must approve the distribution of these revenues at least once a year. Because Chapter 42A's penalty section, Section 42A-48, applies to any tax imposed by the Chapter, a hotel or motel operator that misses a filing or payment deadline is exposed to a specific penalty set under Section 31-8 of the Code, plus an additional penalty for every further 30-day period the failure continues, and 18 percent annual interest on the unpaid balance until it is paid in full.
Violations & Fines
Missing a payment or filing deadline triggers a penalty set under Section 31-8 of the Code plus 18 percent annual interest on the unpaid tax, with an added penalty for each additional 30-day period of delinquency. A person who willfully fails to file, files a false return, or fails to remit tax collected on the city's behalf with intent to evade the tax is guilty of a misdemeanor, punishable by a fine up to the Section 31-8 amount or 90 days imprisonment, or both.
Frequently Asked Questions
Does Duluth's hotel and motel tax apply to every short-term rental?
How is the hotel and motel tax rate set and collected?
Where does the extra hotel and motel tax money go?
What happens if a hotel operator pays the tax late?
Sources & Official References
Other rules in Duluth
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