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Tax collector looks to charge TOT on short-term rentals

Plumas County officials are interested in spending money to make more money when it comes to determining the number of actual businesses paying Transient Occupancy Tax and especially those that are not.

Plumas County is cracking down on local Airbnbs, VRBOs (Vacation Rentals By Owners) and other short-term rentals that are not registering or paying their fair share of TOT.

These rentals are generally homeowners that advertise that the home or property is available to rent to others.

In an effort to do so, Treasurer-Tax Collector Julie White is working with Host Compliance, a company that works with counties to comb online resources locating short-term rentals. And this service comes for a fee.

White told the Plumas County Board of Supervisors on Sept. 11 that the company located 363 such businesses in Plumas County on an initial search. She’s sure these represent both duplicates and new businesses not on the county’s tax rolls.

Despite additional funds for 2018-19 approved by supervisors for her department, White said she and her staff simply don’t have the time or expertise to track down potential short-term rentals not currently on tax rolls. Locating a short-term rental isn’t always as simple as Googling an online resource. They cross-reference and sometimes it takes savvy to know where to look.

Based on the number of potential businesses Host Compliance initially located, White said they want $22,500 to complete the job.

Supervisors, especially Michael Sanchez, directed White to determine if Host Compliance would negotiate that price quote.

White said she checked out the company with other counties including Mendocino, Monterey and Del Norte. Two of the three were very pleased with the results, she told supervisors.

Success really depends on the amount of TOT-related business done in these areas.

Mendocino reported having favorable experiences with Host Compliance. “But Mendocino County is not Plumas County,” White said.

Del Norte County doesn’t have the tourism Mendocino experiences and their experience with the company wasn’t as positive.

“We’re the little people,” Supervisor Lori Simpson interjected.

“I think we’re missing the boat,” White said as she asked for approval.

How it works

Host Compliance offers a variety of services based on short-term rentals. “Through statistical data information they are able to provide municipalities with names, addresses, average rental rate, types of rentals, tracking and auditing,”  according to White.

Services include mobile-enabled permitting and registration, address identification, compliance monitoring, rental activity and collection support, and finally a dedicated hot line for complaints about renters.

White said the company would even send out letters to targeted businesses on county letterhead stationary requesting compliance with county codes.

White didn’t think Plumas County’s short-term rental volume was enough to justify mobile-enabled permitting and registration, or the hot line.

Chair of the Board of Supervisors Jeff Engel immediately agreed about the need for a hot line for complaints. “It’s not a big problem,” he said.

“I get quite a few,” said Supervisor Sherrie Thrall. But the Lake Almanor area has more TOT-related businesses.

Thrall went on to say that the majority of cases are managed by Homeowners Associations. Some call the sheriff’s office to register complaints concerning renters’ activities.

In fiscal year 2017-18, Plumas County received more than $1.3  million in TOT, White said. Three percent of that remains as operating fees for her department. That funding is based on 500 businesses that are compliant, she added.

“I would say that half of these people (363) are not registered,” White said.

Although Airbnb was included in discussions, it actually operates differently from other agencies. “Airbnb is different in that they submit the TOT on behalf of the homeowner because they are the “middleman” between homeowner and county,” White explained.

Background

At the Aug. 21 board of supervisors meeting, White was directed to explore TOT collection. “My interpretation from the meeting was that the Board of Supervisors was interested in auditing the currently registered TOT clients in addition to making sure all short-term rental operators are in compliance with the county ordinance,” White said.

“There needs to be equality among the lodging providers regardless of the means of renting,” she said.

Concerning the audit requested by supervisors, White said during the Sept. 11 meeting that having an outside agency conduct it would be expensive. She suggested that in light of the additional funding supervisors gave to her department one of her employees volunteered to take it on.

Simpson asked if this would be a conflict of interest? “The IRS does their own audits,” County Counsel Craig Settlemire explained.

White explained that county code allows the tax administrator or designated representative to do the audit.

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