Motel owners balk at being labeled delinquent
May 20, 2003
In response to a Tahoe Daily Tribune public records request issued May 6, City Attorney Catherine DiCamillo on Monday released a list of 15 South Lake Tahoe lodging properties owing motel-room tax.
The city declined Monday to release the individual amounts it believes is owed by each lodging establishment, citing a provision under the California Public Records Act in which the city is not required “to compile data, perform research or create new records that do not currently exist.”
While hurrying to prepare for today’s City Council meeting, DiCamillo said she may look into the availability of other public documents.
The back taxes exceed $600,000, but the amount in question could be attributed to misunderstandings, miscalculations or miscommunication, according to a few of the motel owners.
“It’s a big dispute I have with the city over who should be paying taxes,” Thunderbird Motel owner Mike Blanc said, referring to the distinction between long-term renters who pay no tax and transient guests. “That’s what I think is the big problem going on.”
Blanc rents on Laurel Avenue to many occupants who stay longer than 30 days, a designation that omits the levying of the tax on the room rate. Standard properties charge 10 percent plus $1. Those in the redevelopment zone such as Embassy Suites charge 12 percent plus $1, with the passage of Measure Z in November.
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Blanc made the city’s delinquent list, along with the Beachside Inn, Bear’s Den, Cedar Lodge, Chamonix Inn, Christiana Inn, Lakeside Mobile Home & RV Park, Lampliter Inn, Midway Motel, Montgomery Inn, Parkwood Lodge, Sandor’s Chateau Motel, Sunshine Inn and Washoe Motel. A Best Western Inn was also listed, but there’s no motel by that specific name.
The list was compiled while the city went through its books to figure out where it is short in revenue. As an incentive to square up the hotels, the City Council decided two weeks ago to grant amnesty on delinquent accounts if the amounts are paid in full by July 15.
“I can’t speak for everybody, but I know there are questions in the audits. Something needs to change,” Blanc said.
Blanc said the city claims he owes more than $30,000 in principal. The amount more than doubles once penalties and fees are tacked on. He disputes most of it.
Blanc hopes to clear up the matter with the city, in part, by setting up a record-keeping system that matches the local government’s. The system requires evaluating every registration card with scrutiny.
“Why would I hide my revenue?” he asked, adding he has missed a few payments.
Blanc said the mismatching bookkeeping systems may present one of the reasons motels are found to be delinquent.
There may be other factors.
Tanya Montagu of the Beachside Inn said the former owner may have owed $11,000 in back taxes. She bought the Park Avenue motel two years ago with the idea no taxes would be owed.
“The title release form said zero balance,” she said.
Because it is usual for businesses to change hands several times in a short period of time it is easy for money to fall through the cracks. Hotels, like other tourist-based businesses, are hit hard in a bad economy. Newcomers to the area have not always done their research and are caught off-guard by the dismal return on their investment.
The Lampliter Inn also recently changed ownership, with the former proprietor owing the back taxes, according to the city.
City Finance Director Bruce Budman agrees with the lodging managers that new owners should not inherit the debt.
“If we want the money owed to us, we have to go after the old owner. It’s not fair to the current owner,” Budman said, adding the city has received a spate of calls recently from motel owners wishing to comply with the city.
— Susan Wood can be reached at (530) 542-8009 or via e-mail at firstname.lastname@example.org