People will have to pay a little bit more to stay overnight in Soldotna come Jan. 1. That’s when the city’s new 4% lodging tax takes effect.
The Soldotna City Council enacted the tax about a year ago. Vice Mayor Lisa Parker introduced the ordinance as one that would pay for a specific service.
“There would be a dedicated fund set up within the city budget where those funds would be deposited and would be used exclusively for visitor enhancements within the city,” she said.
Parker pointed to a 42% surge in Soldotna tourism over the last 10 years as part of the impetus for the tax. She said she expects tourism to continue growing, and the strain on city resources could be higher. If the city had a 4% lodging tax in place in 2023, it would have generated almost $250,000 for the city.
The same ordinance that created the tax also set up a Tourism Enhancement Fund. It says the tax money can be spent on things like advertising, renovations and maintenance at Soldotna Creek park and other city facilities and support for city arts and culture programs.
Council members OK’d the tax over the objection of some local businesses, such as the Kenai River Lodge and the Aspen Hotel. They said placing the financial burden of a new tax on visitors could deter them from staying overnight in Soldotna. Here’s Kelly Johnson, speaking on behalf of Aspen last December.
“We feel this is just going to be an additional expense to our tourists that, over time, is going to lead them to stay elsewhere to save that money,” she said.
The tax applies to all overnight stays of less than 30 consecutive days. It covers stays at hotels, motels, bed and breakfasts, lodges and short-term rentals, like VRBOs and Airbnbs. Operators had just under a year to register their lodging service with the city.
Now, there’s less than two weeks until the tax goes into effect. And on Wednesday, city council members made some final tweaks. Here’s City Manager Janette Bower.
“As we were enacting, we came up maybe some hiccups?” she said. “Hurdles? I mean some things that needed to be addressed so that we could enact the language. And along with that, we realized we needed some clarifying language.”
The changes approved Wednesday do a few things.
First, the council clarified that the city will be responsible for collecting the tax, rather than the Kenai Peninsula Borough as originally planned. It also streamlines the billing process for operators, outlines a process for cases where the city wants to revoke a lodging license and outlines fines for lodging operators out of compliance with city code.
Operators will be fined $250 for failing to register their business with the city. Operators may also be fined $250 for each day they operate their business unlawfully.
Tyson Cox operates short-term rentals in Soldotna. He thanked city officials for the changes during Wednesday’s council meeting – and asked for a couple more.
“The only ones I had any, still, reservations on is when we’re talking about displaying the operator’s certificate of registration,” he said. “I just am questioning how that can be enforced because there is no access to that to the public if it’s an Airbnb or something like that.”
Businesses can register their lodging service with the city online.