Transient Occupancy Tax Violations = Big Money Loss

The topic of Transient Occupancy Tax collection enforcement came to the March 4 Town Council meeting after having made the rounds at several Lodging Association meetings and the March 3 Tourism and Recreation meeting. The issue of how to effectively collect TOT from owners who are renting their properties was driven home by several lodging partners who were also there to protest the audit that the Town planned to lay on compliant businesses this year.

The Lodging Association expressed the desire to help the Town with enforcement by using their own databases to track when owners are renting their properties to an owner/guest. An owner/guest is suppose to be a family member or close friend of the owner, but the term has developed into any average Joe that the owner wants to rent to in order to help cover his or her monthly bills. Because these owners are flying under the radar when they rent their units, they are able to greatly discount their rentals from lodging association prices, sometimes up to 50 percent lower. Enforcement has been unable to keep up with technology or the internet and the way people rent.

“This is driving down the overall rental rates we can all charge,” said lodging partner Judy Farnetti.

And the problem is only getting worse, as Steve Schwind, owner of Shoulda Bin a Cowboy pointed out. “Last year I had 6,811 rental nights and 6,508 owner and owner/guest nights,” Schwind said. “I have heard the number of owner and owner/guest nights are expected to triple this year which means I will be upside down.”

Schwind also pointed out that the Council had recently given the contractor and development community, which represents approximately 9% of Mammoth’s population, a break in fees.

“The lodging community makes up about 65 percent of Mammoth’s community and all we are asking you to do is get more money, not take any away,” he said.

The lodging community has estimated at least $260,000 in TOT that is going uncollected.

Council agreed that enforcement should be their top priority at this time. They agreed to suspend the audit, which is a collaborative effort with Mono County, until the Town is able to educate and enforce the public with the ordinance already in place. Council also agreed to review the ordinance in its entirety, to create an anonymous tip line for the public to use when reporting perpetrators, to have staff begin sting operations to catch perpetrators, and to develop a work program to get a handle on this problem that is growing every day.

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