Multiple Business/Tourist-Focused Organizations Announce Opposition to the Premier Resort Area Tax (PRAT)
While the organizations agree that additional funding is needed to improve infrastructure, they are opposed to the Premier Resort Area Tax (PRAT) as the mechanism in which to raise the funds. The following are top concerns raised by our members.
The Referendum is Misleading. Locals will Pay Most of the PRAT.
The business organizations estimate at least 74% of the funds will come from local individuals, not tourists. While the name of the tax is accurate, it was designed for communities with significantly more tourists. La Crosse County is seeking an exception to be able to charge it. The wording of the referendum falsely implies a larger majority of tourists will pay the tax. We know that is not the case.
The PRAT Will Detract Large Tourism Groups.
La Crosse County is at the maximum percentage the state allows for room tax (8%). An additional tax will put La Crosse County higher than other communities and could deter leisure visitors, conference/meetings, and sporting events from coming to our area. If the tax were to go into effect, travelers and facilitators will compare prices and take their business elsewhere. At a time when the La Crosse Center is seeking expansion, our quantity of hotel rooms has increased, and our tourist attraction positioning is increasing in the state, this additional cost will cause large conventions who look at the bottom line to choose cities without the additional cost. It all adds up, especially for large events that have a huge economic impact on our area. We cannot afford to lose the large groups of visitors.
It Creates Inequitable Competition Between Stores in the County.
Because the tax is based on what type of product the business sells the most of – their Standard Industry Code or SIC – there is disparity in who will pay. If someone buys anything new at an outdoor rental store – for example a tent, they will pay the tax. They won’t pay it at a larger outdoor specialty store. PRAT should not put stores within our county into greater and inequitable competition.
It Widens the Gap of Competitiveness with Minnesota.
Wisconsin clothing stores collect sales tax. Minnesota stores do not. This widens and further encourages people driving to Rochester and Minneapolis for purchases due to savings – particularly on bulk purchases or higher priced purchases such as wedding dresses.
It Widens the Gap for Brick and Mortar Stores Versus Online.
Competition with online sales continues to put our local stores at a disadvantage. They already function as showrooms for people who walk out the door and buy online to not have to pay the sales tax. This puts our brick and mortar stores at an even greater disadvantage.
Credit Card Processing Fees to Collect the PRAT Increase Overhead for Businesses.
Credit card usage is continuously increasing. The fees for their use are paid by business. Because the fees are paid based on total cost including tax, this increases the overhead costs to businesses.
There is No Correlation Between Who Pays the Tax and Where Roads are Being Improved.
The infrastructure improvement needs are great throughout the County. It is reasonable that a business asked to collect the tax would see the funds used to fix the street in front of their businesses for their customers who walk in the door and pay the PRAT. While the current proposal gives 25% to the municipalities, 75% goes towards more rural county roads.
The Industries Collecting the PRAT are Too Broad for Our Type of Businesses.
Many businesses felt they should not have to collect the tax because so little, if any of their business is from tourists. The statute was designed for areas where the large quantity of tourists significantly impact the many types of businesses listed.
It Should Sunset.
There is concern that this tax will become a permanent tax and part of the County’s operating budget even if federal or state funding increases. Some businesses believe there should be a sunset to the tax.
190 Businesses Said
In a survey conducted in February
Feelings on the PRAT
- Opposed 60%
- Support 21%
- Undecided 19%
Increasing Funding to Improve Roads