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Wednesday, 14 September 2011 13:13

Tourism agency targets tourist rentals flying under the room tax radar

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Haywood County business owners who have been dodging the 4 percent lodging tax will now find themselves facing a crackdown, although some dodgers may not even be aware of their crime.

The lodging tax applies not only to hotels, B&B’s and traditional overnight stays, but also to those who rent out vacation homes or rooms for fewer than 90 days.

A flyer will be included in every property tax bill this year explaining the 4 percent tax vacation home owners should be levying and remitting to the Haywood County Tourism Development Authority.

Many second-home owners who rent their houses on the side for a little extra money often don’t even know that they have to pay, said Lynn Collins, executive director of the TDA.

Collins and her team trawl Websites such as Trip Advisor, Home and Away, and VRBO, which all advertise vacation rentals, complete with address, photos and customer reviews.

Mostly, when people realize they have to pay, they’re pretty good about getting compliant, said Collins.

Collins calls the push to bring in the money an awareness campaign, but her group isn’t just trying to reach the unknowing. They’re going after folks who have simply stopped paying outright, not only by the standard methods of levying fines but also pursuing delinquents through court.

Determining why business owners don’t pay is a little tricky, especially motel owners who know they should and simply don’t.

“It’s a combination of things. Some of it has to do with the economy, some of it has to do with awareness,” said Collins. “For the people who have perhaps quit paying or quit filing, we don’t know.”

For those who use the economy as an excuse to not pay, the reason falls pretty flat.

“This is not coming out of their pockets,” said Collins.

The businesses are simply acting as a pass-through from customer, who pays the extra tax on their overnight room bill, and remitting it to the TDA.

Many businesses, she posits, may not consider the tourism tax quite as mandatory as across-the-board taxes like sales and income tax.

And, said Collins, the tourism authority hasn’t been as staunch about enforcing the laws in the past, which will now change.

Collins said that businesses who begrudge the tax should recognize that its buying them a range of marketing services, even for small, by-owner vacation rentals.

“They get a free listing on the TDA website, they get a free listing in the TDA visitor’s  guide, they get a free listing in the state visitor’s guide and travel website, so there’s a tremendous amount of marketing being done on their behalf,” said Collins.

Regardless of the benefits, paying up is just the law.

“We’re losing a lot of money and it’s not fair to the folks who are following the law and paying the tax for some of their peers to not be doing it,” Collins said.

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