No more tolerance for not paying TOT
If you own an unregistered vacation home rental in South Lake Tahoe, take notice.
The city, in its efforts to crack down on homeowners using their residences that way without paying transient occupancy tax, sent a $50,000 bill including interest and penalties to a Bay Area man who owns three Tahoe Keys homes.
The man has rented the homes for three years and never paid the motel-room tax, which amounted to about $30,000, reported Karen Kuentz, who tracks vacation home permits for the city. Kuentz said the man cooperated when contacted by the city by handing over records.
Lodging establishments in the city pay 10 or 12 percent plus $1 per night.
City records show 1,139 registered vacation homes in town.
The city finance department has diligently been searching the Internet to seek out property owners advertising their homes commercially, Director Bruce Budman told the council Tuesday.
The City Council expressed interest in auditing vacation homes like it does the hotels and motels around town.
“An outside auditor will provide accurate data,” Councilwoman Kathay Lovell.
Many have gone unaccounted for before the city created its latest vacation home rental ordinance.
Jim Foff, who runs the Fantasy Inn, asked for a parallel playing field in respect to charging and treating the homes like the hotels in town.
“I want to see the city define vacation home rentals,” Foff said.
Foff said he’s willing to support the city if it needs to increase the TOT by 50 cents. The half dollar was an option on Measure Z, an increase in the tax voters approved last year. It would go into effect in the event of a catastrophic budget crisis.
In turn, council members sympathized with him.
Councilman Tom Davis, who co-owns Tahoe Keys Resort, agreed even though his property management company would be subject to such an audit. Davis essentially made the argument that if the city opts for a tax increase, it should collect on what is owed.
The City Council also agreed Tuesday morning to hire Maze and Associates of Walnut Creek for $36,500 to undertake an audit of its financial records for the fiscal year ending Sept. 30. The 2003-04 fiscal year begins the next day.
The discussion of audits, motel tax and vacation homes came out of the City Council’s responses to the El Dorado County 2002-03 Grand Jury Report findings.
The city disagreed with the grand jury on a number of fronts in its observations of how the local government treats transient occupancy tax and vacation home rentals. On two items in dispute, the grand jury claimed the city was underpaid by five rental agencies in town by $100,000, with individual home owners owing the city about $85,000.
“To our knowledge, the city has never been provided with the investigator’s report and therefore cannot verify this statement,” staff said in a report.
The grand jury also found the city was failing to follow its guidelines as to what is considered rent to be taxed. The South Lake Tahoe Lodging Association disputes lumping auxiliary charges like cleaning fees under the taxable income category.
The city disagrees and pledged to clarify the definition by the end of the year. The matter will return to its next meeting slated for Sept. 16.
About the same time, residents and visitors should see a change in the look and stops on bus routes. The council approved Area Transit Management’s proposal to eliminate stops for its new Bluego transit system. The system encompasses the South Tahoe Area Ground Express and Bus Plus shuttles. The 5-0 vote came despite some community dissent.
ATM, which runs the transit system for the city, is due to drop westbound stops at the intersections of Pine Boulevard and Stateline Avenue, Pine and Park Avenue, and Park and Manzanita avenues.
The city wants to make its new transit center located east of the Timber Lodge off Highway 50 its transportation hub for the east side of town. The transit center is due to open in October, while the coordinated transit system should roll out next week.
ATM hopes to increase ridership through CTS by at least 5 to 10 percent. More than 1.3 million riders took advantage of the service last year.
The City Council also approved an increase in the expenditures necessary for completing the Ski Run Boulevard Bike Trail project by $118,564. Additional costs were accrued with utility line and storm drain improvements.
— Susan Wood can be reached at (530) 542-8009 or via e-mail at email@example.com