Short-term rentals in Faribault, explained properly.

Sec. 14-193(b)(1) requires a local agent to be identified if the owner does not reside in a listed county. Sec. 14-191 defines the local agent as a person responsible for maintenance and operation of the rental, legally constituted and empowered to receive service and orders on behalf of the owner and to take remedial action. The listed counties are Blue Earth, Carver, Dakota, Dodge, Faribault, Freeborn, Goodhue, Hennepin, Le Sueur, Mower, Nicollet, Olmsted, Ramsey, Rice, Scott, Sibley, Steele, Wabasha, Waseca and Washington. Partnerships, corporations, LLCs and other business associations that own a licensed rental must give the names and addresses of all partners, shareholders or interest holders on request, in a sworn affidavit if requested (Sec. 14-193(b)(2)). Licensees answer for the acts or omissions of their managers, operators and agents (Sec. 14-193(b)(3)).

Sec. 14-193(b)(4) sets this as a license requirement for the owner of any short-term rental unit. Ask the City what documentation of coverage it accepts.

Sec. 14-193(b)(6) bars issuing, renewing or maintaining a license unless an inspection has occurred. Sec. 14-194(a) lets the compliance official cause inspections on an annual basis for all short-term rental units and when reasonable grounds exist to believe a violation has been or is being committed; the owner or local agent must be present and access may not be unreasonably withheld. Inspections are based on the International Property Maintenance Code version presently adopted by the City, and properties must comply with other local regulations (including public nuisance, parking, animal and building and construction ordinances) and the adopted state fire code (Sec. 14-194(b)). Reinspections (follow-up inspections to confirm a correction, after a missed or prevented inspection, or any inspection after the first) are charged a fee set by the city council (Secs. 14-191, 14-194(c)); the fee amount was not read for this page.

Sec. 14-193(b)(7) applies to every licensee of a short-term rental dwelling.

Sec. 14-193(b)(8) lists collection of the City lodging tax as a license requirement. Chapter 14, Article V (the lodging tax article it refers to) was not read for this page, and this page does not total state and City taxes. For the Minnesota state sales tax on short-term rentals, see the state rules shown on this page.

Sec. 14-195(b) makes a violation of the article a misdemeanor. Penalty ranges for misdemeanors are set elsewhere in the Code and in state law, which were not read for this page.

Sec. 14-195(a) says any action to deny, suspend or revoke a short-term rental license may be appealed to the city council. Ask the City Clerk for the appeal deadline and how to file.

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.