Paying taxes and short-term rentals
Questions about vacation home-away-from-home properties asked by city
Tweak; transitive verb. 1: to make usually small adjustments in or to tweak the controls especially, fine-tune.
– Merriam-Webster Dictionary
During the Monday, July 19, meeting of the Anderson County Commission an — at times — intense discussion was held about a Vrbo (Vacation Rental by Owner) property in the Henderson Bend subdivision in the Claxton community.
Anderson County Attorney Jay Yeager said he would offer an opinion to the commission in about 30 days.
A synopsis of what transpired July 19 in Room 312 at the courthouse pits a state law against local resolutions and ordinances and the power a government has (none, seemingly) over a short-term rental property as compared with a homeowners or condominium association board.
Those boards have the power to address any grievances, not a government body.
The state adopted this stance, this law, in 2018 as a response to growing number of private property rentals state-wide.
These properties used for short-term, or vacation, rentals are a business, but the state says, via the 2018 law, they are residential properties and local government resolutions and ordinances don’t apply.
Except for the tax man.
Anderson County Commissioner Teresa Scott asked July 19: “How long have they have been doing this, and if it is considered a business, just throwing the assumption out there, then they owe the county some money.”
Finding out how much money that should be is the problem.
Monday night Clinton City Councilman Larry Gann asked the same question.
Of the 30 known “short-term” rental sites known in Anderson County, at least two of those are within the City of Clinton.
“Are e getting the appropriate taxes,” he asked City Finance Director Gail Cook.
“We are getting ... We have been getting for now for a month with our state shred revenue ... We posted the hotel/motel tax. Where that comes from or what that entity is I don’t know what that is ... we are getting something,” she said.
And that’s the rub as far as short-term rentals are concerned with paying proper hotel/motel taxes.
During the July 19 Anderson County Commission meeting Anderson County Mayor Terry Frank said the State Legislature would make adjustments to the 2018 act regarding short-term rentals.
Anderson County Director of Tourism Stephanie Wells said the county is receiving a pretty good chunk of tax revenue from short-term rentals.
“Short term reantls are suppose to pay hotel/motel tax according the short term rental legislation,” she said.
Short-term rentals are usually listed through a third party and it is up to that third party to collect the tax and forward it to the sate.
The state then forwards those tax funds to county and/or city the property is located.
But …
“I understood the properties were subject to the hotel/motel taxes and the site (the listing agency) collects the taxes,” Commissioner Robert McKamey said.
McKamey also noted he understood the state had three auditors, for the entire state, monitoring the tax payments.”
“We have seen a huge increase,” Well said.
She noted that some short-term rental sights, “Don’t forward that on, but we’ve had that issue with the hotels in the past.”
She added, “It’s hard with the short-term rentals because they are seasonal.”
Here again the 2018 Act sorta hampers local tax collection.
If not taxes from a short-term rental are forwarded during a winter month — Januray was given as an example — “We don’t know. Even if we knew someone rented that property, we can’t go back to them and say, ‘We know you had people,’ because we don’t know.”
Wells said that now that the state is collecting from a third party the state should be able to go back and correct that.
Still, the problem exists.
“The problem is, it’s not broken down as to what property is paying what (in taxes),” Wells said.
“If you’re renting out a piece of ground in your back yard you’re supposed to pay hotel/motel tax on that,” she said. “A lot of them are. A lot of the have not.”