Short-term rentals in Bayport, explained properly.

Sec. 748.03(6) ties each license to one property and one owner and says it expires when ownership of the property changes. A new owner applies for a new license, which is subject to the ten-license cap and the adjoining-property limit.

Sec. 748.03(2) says an application is made on a City form and license fees are as stated in Appendix D of the Bayport City Code. Refunds of license fees are not issued. If required application information changes during the license period, the property owner must notify the city within 30 days, and failing to do so is a license violation. The fee amount and the date of the fee schedule are not shown here.

Sec. 748.03(1) lists the site specifications a property must meet to be considered: (a) at least one bedroom, with all bedrooms in the principal dwelling and no accessory structure bedrooms; (b) open, unblocked interior access to the short term rental dwelling area within property owner occupied, single-family dwellings; (c) open, unblocked interior access to an operating kitchen and bathroom for transient guests; (d) operating gas, electric, water and sewer service as applicable; (e) trash and recycling collection service and containers; (f) house numbers easily visible from the street day and night; (g) residential code standards identified by city inspection; (h) proof of liability insurance of at least $300,000 in the aggregate, with coverage confirmable within 24 hours of a city request, or proof of an agreement that each rental is conducted through a short term rental platform with equal or greater coverage; and (i) proof of a Minnesota Sales Tax Account Number or that one has been applied for.

Sec. 748.03(4) says applications meeting license eligibility and residential code standards will be considered for approval by the City Council. After approval, notice of the license is mailed to all surrounding property owners within 350 feet of the property. Grounds for denial include false or misleading statements on the application, and a development contract, planned unit development, homeowners' or neighborhood association covenant, rule or regulation, or land use requirement that restricts rental units; the list is not exhaustive and the city may rely on other grounds in the sole and absolute discretion of the Council.

Sec. 748.03(5) issues all licenses for one year, beginning January 1 and expiring December 31. Under Sec. 748.03(7) renewal is processed in the same manner as the original application, including the inspection, without Council approval unless the city administrator deems it necessary. A license is a privilege and does not entitle the holder to automatic renewal. A renewal after a suspension or revocation in the preceding 12 months is subject to Council approval.

Sec. 748.04(1) limits transient guests to four per bedroom, with one additional guest per dwelling, and in no case more than 12 transient guests per premises. The primary overnight and daytime transient guest must be an adult 18 years of age or older (Sec. 748.04(2)).

Sec. 748.04(3) applies the City's noise regulations to short term rentals, including reduced noise levels between 10:00 p.m. and 7:00 a.m. The City noise regulations themselves haven't been reviewed yet.

Sec. 748.04(4) bars special events, loud parties, camping, fireworks and the discharge of firearms at a short term rental.

Sec. 748.04(5) provides that there is no change in the exterior appearance of the home or premises, or other visible evidence of the conduct of a short term rental, except that additional off-street city code compliant parking may be provided and appropriate signage designating such.

Sec. 748.04(6) requires the property owner to give the city and any transient guest an emergency contact available to respond to complaints about the condition, operation or conduct of transient guests within 60 minutes.

Sec. 748.04(7) bars the owner or manager from advertising or promoting the dwelling as a short term rental if it is not licensed by the city or is in violation of the city code or state law, and requires all advertising to include the city-issued license number. Sec. 748.04(8) requires the unit to post in a prominent place the items listed in Sec. 748.04, the owner, manager and emergency contact information, the license number, and rules for outdoor features.

Sec. 748.04(9) requires reasonable action to notify law enforcement of disorderly behavior, which can include violations of noise, nuisance, disorderly conduct, violence, property damage, weapons, disorderly house, unlawful assembly, alcohol or illegal drug laws.

Sec. 748.05 lets the City suspend or revoke a license on any of these grounds: three or more relevant and substantiated complaints within a 12-month period; violation of the building, fire, zoning or safety code or other city ordinance upon notice; certain criminal convictions or charges listed in the section; false statements or failure to provide timely updated information; delinquent real estate or personal property taxes, municipal water/sewer or waste collection charges, or unpaid fines owed to the city; and failure to meet eligibility or use of property requirements. The City gives written notice to the owner with notice of the right to appeal to the City Council under section 503 of the zoning code.

Sec. 748.06(1) says a violation is a basis for suspension or revocation and is subject to civil penalties or administrative fines and possible injunctive action; each violation is a misdemeanor under state law; the city may impose a civil penalty of up to $1,000.00 for renting, leasing or occupying a residential building or rental dwelling, or part of one, for less than 30 days without a license; failure to pay civil fines may result in future license ineligibility; and each day is a separate violation. Under Sec. 748.06(2) the fine for each substantiated and relevant complaint or violation is stated in Appendix D (Fee Schedule), which is not shown here. Sec. 748.06(3) lets the City bring an action to restrain, enjoin or abate violations.

The Department of Revenue guide says residential short-term rentals (a home, a portion of a home, or any other property used as a temporary place to stay or live) are a form of lodging and related services, and that charges for them are subject to the general rate sales tax and any applicable local and lodging taxes. Revenue Notice 17-06 (published in the State Register on September 25, 2017) says state and local taxes are due on lodging if the lease or rental is for less than 30 days, or for 30 days or more if there is no enforceable written lease agreement that requires the customer to give prior notice of their intention to terminate the lease. The lodging guide's table for tips and service charges lists the state general rate sales tax as 6.875%. Sales of lodging that are isolated and occasional and not made in the normal course of business are exempt from sales tax under Minnesota Statutes section 297A.67, subdivision 23, as the notice states, and the guide adds that the income tax rule for renting out a home for 14 days or less does not carry over to sales tax. The guide says some cities administer their own lodging taxes and the state rate calculator leaves out special local taxes, so city taxes are shown on each place's page and this page does not total state and local taxes. The guide was last updated May 15, 2024.

Revenue Notice 17-06 says that if the residential property is in Minnesota, the owner must register as a retailer to collect, report and remit sales tax and applicable local taxes when both of these apply: the owner regularly furnishes lodging directly to a customer in the normal course of business (for the purpose of profit or producing income), and the customer makes the reservation with and pays the owner. The owner is not required to register or collect when the owner uses an accommodations intermediary to facilitate all sales of lodging at the property, or when the owner's rental is an isolated incident not made in the normal course of business. When an owner who regularly rents directly also uses an intermediary, both have liabilities: the owner collects on sales made without an intermediary, and the intermediary collects on the sales it facilitated. The guide says the owner must keep documentation of who facilitated each sale and was responsible for remitting the tax. It describes an isolated sale as one that happens once and an occasional sale as infrequent and not recurring with some degree of regularity.

Revenue Notice 17-06 says an accommodations intermediary that facilitates the sale of the short-term rental of residential property located in Minnesota must register as a retailer to collect, report and remit the taxes on the full sales price of lodging and related services, whether the intermediary or the renter is in Minnesota or not. Facilitating the sale includes collecting receipts from the customer and transmitting them to the owner, directly or through third parties, whether or not the intermediary deducts fees from those receipts. It does not include mere advertising that directs the customer to contact the owner to reserve and purchase. The full sales price includes all amounts the intermediary charges the customer. Statute section 297A.61, subdivision 47 defines the term accommodations intermediary, as the notice cites. The notice is dated September 2017 and the guide May 15, 2024.