City of SLT: Just do your job
Why is the city out of money and turning to increasing the business tax as a solution? Because they are not managing the taxing resources that they have at hand. The city government, just like the federal government, only knows how to raise taxes. They do not know how to administer the taxes that they are already entitled to.
When I say “entitled to,” I am partially referring to Transient Occupancy Tax which, years ago, was established to promote tourism in our community. As far back as I can remember, the TOT was established at 8 percent with a minimum of 2 percent being allocated to the Chamber of Commerce, Lake Tahoe Visitors Authority and other marketing and promotion programs. Then, because of mismanagement, they had to raise the tax to 10 percent also with an allocation of 2 percent to tourism promotions.
The insatiable appetite of government could not resist taking all of the tourism promotion money, leaving local businesses without an advertising arm. The community responded and the tourism businesses agreed to impose a fee on rentals which was the only way we could ensure that the government would not take our funds again.
Now we see that the city is conducting a survey in an attempt to justify ripping off more from the tourists and floating a business license fee increase question on the latest citizens’ satisfaction poll.
The potentates that sit on their thrones at the airport are emblematic of King George, who kept wanting more out of the Colonists. They take the easy way out and don’t enforce the tax system that they have in place.
In May of 2011, we informed the council that they were potentially losing $500,000 in TOT each year by not enforcing their vacation rental regulations against owners renting their properties directly to the public without being permitted or remitting tax to the city. The existing law states that any internet advertising by either private property owners or vacation rental companies must include a city vacation rental permit number. At that time, compliance was less than 8 percent on the Vacation Rental By Owner website and increased to about 12 percent after we prodded the city to get with the program.
Even then, with permits being displayed, the city did not have any follow up as to whether the homeowners were remitting the proper taxes.
After several meetings with the finance department, police, city attorney and city manager, we helped create a comprehensive monthly rental report form to be submitted by rent-by-owners. Also, we had software developed which would collect monthly information on blocked out reservations on each VRBO property. For one month, this form was distributed by the city to the homeowners. After reported objections by the homeowners, the city finance department abandoned this tool for the auditing of TOT collections.
The software that we had developed was offered at no cost to the City, but they chose instead to avoid the “hard work” in the enforcement and tax collection functions and chose to hire an outside firm to do their work. That plan was in mid-December and there has been no implementation of it to date.
The city says that private industry will collect the tax and fines at no cost to the city. How can this be when valid fines and penalties should be property of the city? Who cares? “We’ll raise the tax on businesses. That will take care of our problems.”
P.S. Not to be all negative, I was pleased that the citizens’ reactions forced the “royalty” to back down on parking meters.
– Jim Morris is the president of Lake Tahoe Accommodations. He lives in Gardnerville, Nev.