The Haywood County Tourism Development Authority may outsource its search for vacation home renters who are evading the county’s 4 percent tax on overnight lodging.
Lynn Collins, director of the tourism agency, plans to meet with Virginia-based software company VRCompliance over the next month. The company scours the Internet for property listings and helps identify renters in the county who are not collecting room tax.
The company would get a finder’s fee for each offender it tracks down that is brought into compliance, Collins said, but didn’t know exactly what that fee is yet.
Ferreting out people who rent their vacation homes under the radar is such a universal problem, VRCompliance, which stands for Vacation Rental Compliance, saw it as a business opportunity. It created software to search the web for vacation listings, and is now marketing that service to tourism agencies across the country trying to enforce the room tax.
Part of the problem is simply ignorance that vacation home rentals are subject to the overnight tax. Last month, the Haywood tourism agency announced a campaign to inform vacation homeowners that they are required to levy a 4 percent tax if they rent their property.
“That’s where the big money is,” said Ken Stahl, the board’s finance chair.
Stahl said he looked into cross-referencing local cabin addresses with the North Carolina Department of Revenue’s income tax records, but the department has not been willing to cooperate in the past.
And, even if the agency identifies properties skirting the tax law, the consequences — a fine or legal action — are still not enough to convince some to pay. While some are unaware of the law, other lodge owners are knowingly ignoring it, apparently collecting the tax from patrons but not passing it along to the county.
“Many of the hotels and motels feel that nothing is going to happen … because nothing has happened in the past,” said Marion Hamel of the Haywood County TDA.
During its meeting last Wednesday, the tourism board discussed other ways to enforce the tax law.
“We just got to have teeth,” said County Commissioner Michael Sorrells.
Among the options discussed were printing repeat offenders’ names in the newspaper and pulling their information from the board’s website and publication.
The county has previously used liens to bring people into compliance and mailed letters threatening legal action. Those who owe taxes also receive monthly bills.
“They know they’re not paying,” said Julie Davis, the finance officer for Haywood County.
The tax on overnight lodging is used for tourism promotions for the county. Haywood County collected about $135,198 in occupancy taxes this July — almost $10,800 less than the same period last year.
Stahl said the economy and a decline in tourism are responsible for the decrease.
“People say it’s not a double dip recession, but it sure feels like it,” he said.