The News: The Wisconsin Institute for Law & Liberty (WILL) filed a petition for review, on behalf of three Lake Geneva residents, to the Wisconsin Tax Appeals Commission, challenging the City of Lake Geneva’s $750 annual licensing fee to rent a home on a short-term basis. Lake Geneva’s fee is one of the highest in the state and bears no relation to the cost of licensing short-term rentals.
The Quote: WILL Deputy Counsel, Luke Berg, said, “Lake Geneva’s annual licensing fee for short-term rentals bears no relation to costs the city incurs to issue such licenses. State law gives homeowners a right to rent their home and prevents local governments from charging extreme fees.”
Background: In May of 2018, the City Council established an annual licensing fee of $2,000 after the City adopted an ordinance regulating short-term home rentals. WILL sent a letter in the Fall of 2019, on behalf of local residents, warning the City that the exorbitant licensing fee – the highest, by far, in the state – violated Wisconsin state law and may result in litigation.
In June 2020, the City Council amended their ordinance and dropped the annual licensing fee to $750 – still one of the highest in the state. Nearby communities in Walworth County charge far less. The villages of Walworth and Fontana, located just on the other side of Geneva Lake, charge $200 and $250 respectively for short-term-rental licenses. The Town of Delavan, a few miles down the road, charges only $100.
State law requires that “[a]ny fee … imposed by a political subdivision shall bear a reasonable relationship to the service for which the fee is imposed.” WILL’s petition to the Wisconsin Tax Appeals Commission urges the body to require Lake Geneva to refund any portion of the $750 annual licensing fee that “exceed[s] [Lake Geneva’s] reasonable direct costs” associated with licensing short-term-rental properties.