Short-term rentals in Bemidji, explained properly.

Sec. 28-420(c)(1) lists the Minnesota Department of Health review among the steps that must occur before an initial application is accepted or complete, and (c)(2) requires certification and a copy of the Department of Health review or inspection report with the application. Sec. 28-420(b)(3) also says all other approvals that may be required, including a license from the Minnesota Department of Health, must be obtained. Whether and when the State requires a lodging license for a given rental is covered on the Minnesota page, not here.

Sec. 28-420(d)(7) says the short-term rental is defined by the maximum length of stay of 30 consecutive days, and that if guests stay longer than 30 consecutive days the owner or applicant must apply for and be granted a long-term rental property license at the time of the short-term rental permit process, if within the city limits. Sec. 28-420(d)(18) says a licensee who wants to rent to one party for longer than 30 consecutive days must also obtain a long-term rental license, and that the annual short-term rental permit and a long-term rental permit are not interchangeable. The long-term rental licensing rules haven't been reviewed yet.

Sec. 28-420(d)(8) sets the guest limit at the number of bedrooms contained in the building multiplied by two, including adults and children. Under (d)(5) the number of bedrooms on the license is used for all calculations, and no licensee may advertise more bedrooms than the license identifies. Dining rooms, closets and kitchens are not counted as guest bedrooms on the application floor plan (Sec. 28-420(c)(2)b).

Sec. 28-420(d)(6) requires all guest parking to be accommodated on improved surfaces on the premises in line with the parking standards of article X, and says on-street parking is not allowed for guests. At least one space is required for each bedroom up to three bedrooms; properties with four or more bedrooms need spaces equal to the number of bedrooms minus one. Parking may not encumber the district's minimum greenspace, landscaping rules, or ingress and egress of the neighborhood or rights-of-way, and parking conditions may be placed on the license. The guest disclosure must state the maximum number of vehicles allowed and show the permitted parking locations.

Sec. 28-420(d)(13) requires the licensee to designate the agent or contact. The licensee must notify building staff within ten days of a change, and within ten days of that notice planning and zoning staff send the updated contact information to the properties within 500 feet that received notice of the license. Complaints go first to the owner, local managing agent or local contact and then to building staff (Sec. 28-420(e)(3)).

Sec. 28-420(d)(2) says annual licenses are non-transferable and terminate automatically on sale or other conveyance of the property. Sec. 28-420(c) adds that the license terminates on a change in ownership and the new owner pays all fees that would be required for any new application. Under (d)(3) the license is a revocable, limited right and does not give a vested property right in short-term rental of the property.

Sec. 28-420(c)(6) says the notice goes to owners within a 500-foot radius drawn around the property, and that failure of an owner to receive it does not affect the license's validity. The notice includes the licensee's name, the address, the phone number of the licensee and/or local managing agent or contact, and the process for filing a complaint.

Sec. 28-420(d)(9) and (d)(10). Failure to submit the annual report may result in revocation or nonrenewal of the license.

Sec. 28-420(d)(11). The disclosure must also include a visual display of permitted parking and, for properties not on municipal services, a staked-out area showing the septic system. The notice says nuisance ordinances are enforced by the Bemidji Police Department or the Beltrami County Sheriff's Department. Events hosted by the property owner are allowed but must follow all applicable ordinances and policies and obtain all required approvals; the definition of special events is in section 28-9, which hasn't been reviewed yet.

Sec. 28-420(d)(12).

Sec. 28-420(d)(16), (d)(4), (d)(15) and (d)(14). No physical alterations are permitted in conjunction with operating a short-term rental, except additional on-site parking where the development code otherwise permits it and updates needed to bring the structure or site into compliance with codes (Sec. 28-420(d)(1)). Excessive trash or debris must be removed within a week of the guests' stay. The licensee is responsible for paying all federal, state and local taxes in addition to state sales-use tax (Sec. 28-420(d)(17)); this section does not list a local lodging tax rate.

Sec. 28-420(e). Before revocation, building staff mail written notice to the licensee and local contact, and the license is suspended until the violation is corrected or the licensee agrees a plan of action with staff; no guests are allowed on the property during suspension. The licensee has ten days to request a hearing before the council; failing to request one waives the right to be heard. If a hearing is requested, the council acts on whether to revoke and, if it does not revoke, may add conditions. A fine amount is not shown in this section.

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.

Section 157.16, subdivision 1 says a license is required annually for every person, firm or corporation engaged in the business of conducting a food and beverage service establishment, youth camp, hotel, motel, lodging establishment, public pool or resort. Section 157.15 defines a hotel or motel as a building, structure, enclosure or any part of one used as, maintained as, advertised as or held out to be a place where sleeping accommodations are furnished to the public for periods of less than one week; a lodging establishment as sleeping accommodations furnished to the public as regular roomers for periods of one week or more with five or more beds to let to the public (or the health-care lodging described in the definition); and a resort as a place on or near a lake, stream, skiing or hunting area or other recreational area, held out to the public for recreation stays and having for rent five or more cottages, rooms or enclosures. The Department of Health's rules and guidance were not read, so whether a particular rental needs a state license should be confirmed with the Minnesota Department of Health. City licensing and registration are separate and are shown on each place's page.