Overview: Are Short-Term Rentals Allowed in Ellison Bay?

Yes. Short-term rentals (STRs) are allowed in Ellison Bay, which lies within the Town of Liberty Grove in Door County, Wisconsin. STRs are subject to a layered compliance framework—state licensing, county lodging permits, and municipal (Liberty Grove) licensing—plus ongoing tax filing and sanitation constraints. Investors should plan for all four layers and build time into the process for inspections, approvals, and tax setup.

The Door County Tourism Zone Commission administers the countywide lodging permit and room tax. The State of Wisconsin requires a Tourist Rooming House (TRH) license from the Department of Agriculture, Trade and Consumer Protection (DATCP). Liberty Grove regulates STRs at the municipal level, and Wisconsin statute (Wis. Stat. § 66.1014) establishes statewide guardrails for how municipalities may regulate STRs (e.g., minimum rental durations and day caps for certain short-term windows).

How to Start a Short-Term Rental Business in Ellison Bay (Step-by-Step)

• Confirm your property’s legal status and use. Verify zoning and any HOA or deed restrictions. Review your sanitation system’s capacity (POWTS) to align occupancy with septic/holding tank limits.
• Obtain the Wisconsin DATCP Tourist Rooming House license. Schedule and pass the required state inspection (valid up to three years). This is a prerequisite for county and municipal licensing.
• Secure a Door County Tourism Zone Commission (DCTZC) lodging permit and set up monthly room tax reporting. All STRs must obtain a DCTZC permit and file room taxes monthly.
• Apply for the Town of Liberty Grove STR license. Liberty Grove includes Ellison Bay and requires an STR license; the application, ordinance, and fee schedule are published by the town.
• Establish tax and business identity. State law expects STRs to operate under a FEIN or an LLC; set up sales and room tax accounts as required by the DCTZC.
• Prepare operational documentation. Draft guest rules, emergency contacts, and, where applicable, agent authorization if you will not be present locally.
• Notify neighbors as required. Municipal rules may require notification or posting of property rules and contact information.
• Launch and maintain compliance. Maintain licenses, file room taxes monthly, renew annually as required, and be prepared for compliance checks.

Required Documents, Permits, Licenses, and Guidelines

• State of Wisconsin DATCP Tourist Rooming House (TRH) License
  • Requires a property inspection by a state-licensed professional; license is valid for up to three years.
  • Contact: (608) 224-4923; datcpdfslicensing@wi.gov
  • Reference: DATCP Tourist Rooming Houses overview and licensing portal.
• Door County Tourism Zone (DCTZC) Lodging Permit
  • Countywide permit required; monthly room tax reporting is mandatory.
  • Apply for a permit through the DCTZC; references and guidance are on the DCTZC site and associated forms.
• Town of Liberty Grove STR License
  • Required to operate an STR in Liberty Grove (which includes Ellison Bay).
  • Application and local ordinance links are provided by the town and through the DCTZC municipal requirements page.
• FEIN or LLC
  • Wisconsin expects STRs to operate under a FEIN or LLC; this should be established early in the setup process.
• POWTS (Septic) Capacity Confirmation
  • Guest occupancy must align with the capacity of your on-site sanitation system (POWTS). Door County sanitarian guidance is available on the county site; coordinate with the sanitarian for capacity verification.
• Local Operational Documents
  • Property rules for guests, owner/agent contact details, and, where required, neighbor notification materials.

Specific Regulations (State, County, and Municipal)

• State of Wisconsin
  • Wis. Stat. § 66.1014 limits municipal regulation of STRs:
    • Municipalities may not prohibit rentals of 7 consecutive days or longer.
    • For rentals of more than 6 but fewer than 30 consecutive days, municipalities may cap the total number of days in a 365-day period to 180 consecutive days, but may not specify when that period occurs.
    • Municipalities may require a license/permit for STRs operated more than 10 nights per year, and may enact other regulations not inconsistent with the statute.
  • DATCP TRH License and inspection are required to operate an STR.
  • Business identity: operate under a FEIN or LLC.
• Door County (Tourism Zone Commission)
  • All STRs must obtain a DCTZC lodging permit.
  • Monthly room tax filing is mandatory for all permit holders.
  • Good Neighbor Best Practices and other guidance are published by DCTZC.
• Town of Liberty Grove (includes Ellison Bay)
  • STRs are allowed subject to local licensing.
  • License application is required; fee schedules and ordinance are published by the town.
  • License renewal cadence and any additional local requirements are set by the town ordinance and application materials.
  • Neighbor notification or posting of guest rules/emergency contacts may be required.
• Occupancy and Sanitation (POWTS)
  • The number of guests must not exceed the capacity rating of your septic or holding tank system. Coordinate with the Door County Sanitarian to confirm capacity and permitted occupancy.
• Municipal Requirements Vary
  • Door County municipalities, including Liberty Grove, have individual STR ordinances with differing fees, processes, and documentation. Always confirm requirements for your specific municipality.

Contacts and Authority

• Door County Tourism Zone Commission (DCTZC)
  • Phone: (920) 854-6200
  • Email: info@doorcountytourismzone.com
  • Office Hours: Monday–Friday, 8:00 AM to 4:00 PM
  • Location: 185 E Walnut St, Sturgeon Bay, WI 54235 (office open by appointment); Mailing: PO Box 55, Sister Bay, WI 54234
• Town of Liberty Grove (includes Ellison Bay)
  • Visit the Liberty Grove website for STR application and ordinance; see DCTZC Municipal Requirements page for direct links to application and ordinance.
• Door County Sanitarian (POWTS/Sanitation)
  • Email: sanitarian@co.door.wi.us
  • Reference: Door County POWTS information
• Wisconsin DATCP (Tourist Rooming House Licensing)
  • Phone: (608) 224-4923
  • Email: datcpdfslicensing@wi.gov
  • References: DATCP Tourist Rooming Houses overview and licensing portal

Links to Source Pages (Important)

• Home Hosts of Door County: Short-Term Rental Regulations (State, County, and Municipal Overview)
  • homehosts.org/regulations/
• Door County Tourism Zone Commission: Municipal Requirements (includes Liberty Grove links)
  • doorcountytourismzone.com/municipal-requirements/
• Door County Pulse: Sturgeon Bay changes STR rules (context on county-level litigation/regulatory environment)
  • doorcountypulse.com/city-changes-short-term-rental-rules/
• Boardman & Clark LLP: Short-Term Rental Regulation – Litigation Uncertainty (state statutory context and litigation overview)
  • www.boardmanclark.com/publications/municipal-newsletter/short-term-rental-regulation-litigation-uncertainty
• Wisconsin Public Radio: WILL lawsuit against Sister Bay STR regulations (example of litigation risk and municipal variability)
  • www.wpr.org/news/conservative-law-firm-sues-door-county-village-over-short-term-rental-regulations
• Village of Sister Bay: STR License Requirements (illustrative municipal rules; not Ellison Bay-specific)
  • sisterbaywi.gov/short-term-rental-license-requirements/
• Door County Knock: Growth of STRs in Door County (industry context)
  • doorcountyknock.org/2022/11/door-county-has-added-more-than-500-new-short-term-rentals-since-2018-records-show/
• Direct Liberty Grove documents (application and ordinance) are accessible via the DCTZC Municipal Requirements page and the Liberty Grove website.

Notes:

• Municipal requirements, fees, and renewal timelines can change; confirm the latest Liberty Grove ordinance and application before applying.
• Keep current copies of the DATCP license, DCTZC permit, and Liberty Grove STR license on file for renewals and compliance checks.