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MEMORANDUM
TO: Board of Supervisors
FROM: Carol J. Huchingson, County Administrative Officer
DATE: October 22, 2019
SUBJECT: Discussion and Consideration of Transient Occupancy Tax Waivers
EXECUTIVE SUMMARY:
During your Board's consideration of an appeal requesting a waiver of all Transient Occupancy Tax (TOT), including interest and penalties, your Board directed staff to return with further information for broader discussion while the appeal was continued.
On August 20, 2019, in anticipation of appeals, your Board adopted Resolution No. 2019-118 (attached hereto) providing an option for a certain class of operator appellants with a waiver of interest and penalties in response to multiple appeals recently filed. This class represented first time operators within the last 3 years. Even within this class, however, there are still major distinctions. For example, some properties are small, owner occupied units where an extra bedroom or separate area of the home is being rented. These small units are often seen as providing supplemental income to help cover bills. Others, are large vacation homes on the lake where both the occupancy rates and prices are relatively high. These homes typically generate much larger monthly revenue streams.
Staff has taken a moderated approach to the enforcement effort of the TOT ordinance. While taxes owed by the operator go back the start of their operation, whether it is 10 years or 6 months, staff is only seeking payment for the last 3 years. This decision stems from the ordinance, which provides that the taxpayer is only obligated to maintain the last 3 years of records and because the most cost-effective administrative enforcement measures are available to the County within this period as well. The 3 year period stretching back to 2016 also coincided with media publicizing your Board's efforts to increase TOT enforcement. In more egregious cases, such as those involving potential fraud, the County still...
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