The City of Marinette is taking a hard look at the possibility it is losing money on its room revenue. It has a legitimate reason to dig into the issue and see if there is a problem that can be straightened out.

The matter was discussed recently at a meeting of city officials and the city council’s Finance & Insurance Committee. Stronger enforcement measures could be in the making.

According to the Wisconsin Department of Revenue, a municipality may impose a room tax on the renting of hotels, motels, resorts, inns and other lodging facilities. The law says the tax may not exceed 8%. In the city of Marinette, lodgers pay a 6% room tax.

City officials noted a high rate of ownership turnover of several hotels in the city in the last four-to-five years has complicated matters because of a failure to report revenue and collect taxes owed the city. Reports also have reached city hall that some unidentified hotels have frequently requested cash payments.

“We have had people say that (this or that hotel) asks for cash payments all the time,” reported city Finance Director Jackie Miller.

Concealing cash payments from revenue typifies as easy way to cloak money.

“If an establishment is not recording the cash sales then it probably is not recording the registration (of those guests who paid cash and I don’t know how you would prove that with an audit,” noted Miller.

Marinette earned about $302,000 in room tax in 2018 revenue and gained an additional $3,000 in interest on that fund. The Room Tax Commission, which determines how the city spends that money, appropriated approximately $125,000 to the city-owned Community REC Center, and $40,000 to Welcome Center. Money also is earmarked for major activities such as fishing tournaments.

It’s a good thing the city is working to get a better handle on the room tax. We’re confident city officials will uncover the facts and determine if the problem is intentional or through error.