The Manatee County Commission has toughened an ordinance targeting resort tax evaders.
Under its provisions, a property owner who fails to pay resort taxes on a short-term vacation rental may now be served a warrant by a sheriff.
Other sanctions include liens placed on the property, preventing its sale until payment is made, garnishment of personal property and wages to pay the tax, a 10 percent fee on unpaid amounts, a 5 percent fee for bounced checks and a three-year recordkeeping requirement.
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Violations are a first degree misdemeanor, with a $1,000 fine and up to one year in jail.
Under the ordinance, the tax collector can investigate several types of evidence, including records of condominium or homeowners associations, property management companies, and guest gate entry or parking passes and guest golf or tennis membership records.
Overseas owners targeted
The ordinance was spearheaded by Manatee County Tax Collector Ken Burton Jr., who said he foresees using it sparingly, primarily against European investors who advertise high-end rentals to tourists overseas. It strengthens the previous 25-year-old law that has been revised only twice, Burton said, adding, “Our goal is to keep a level playing field.”
Commissioner and former Holmes Beach Mayor Carol Whitmore said that tourists paying $25,000 a month for a home on the Island “need to pay the tax. This is not the little guy. This is someone who rents their house out for a business.”
Tax dollars that are going back to Europe “should stay here,” commissioner and former Bradenton Beach Mayor John Chappie agreed.
Burton’s staff works to track tax evaders door to door and online – about 81 percent of the county’s 6,600 properties subject to the resort tax are single family homes or condos, often advertised on do-it-yourself vacation rental websites, he said, adding, “Educating new and existing property owners is a challenge.”
By the numbers
Manatee County’s 5 percent resort tax, or tourist development tax, is required to be paid to the county by owners of accommodations rented for six months or less, who charge the tax to their guests. With the state’s sales tax of 6.5 percent, tourists pay a total tax of 11.5 percent on lodgings.
The resort tax requirement is detailed on flyers included in every property tax bill mailed to property owners in the county, Burton said.
By state law, resort tax proceeds can only be used for certain tourism-related projects, including beaches, fishing piers, sports arenas and tourism advertising.
About 53 percent of the county’s 2014 anticipated resort tax collections are budgeted for tourism marketing efforts by the Bradenton Area Convention and Visitors Bureau (CVB), with about 10 percent allocated to beach renourishment, according to the CVB.
Of the $4.3 million in resort taxes generated on Anna Maria Island from January through October, $2.1 million have been allocated to projects benefiting the Island, according to statistics from the Manatee County Tax Collector and the CVB.
Anna Maria Island generated an average 47 percent of Manatee County’s 2014 resort tax revenues from January through October, the last month for which statistics are available. Holmes Beach consistently leads the Island’s three cities in generating resort tax revenues.
Loopholes
A provision of the ordinance states that owners who rent out their vacation properties must report individually to the tax collector on their resort tax collections. “This requirement shall apply equally to individual property owners, realtors, property managers and other persons who hold themselves to represent multiple properties for benefit,” the ordinance states.
Some property owners charge the tax to tourists but keep it, said Sue Sinquefield, a senior staff member in the tax collector’s office.
An Anna Maria property owner who wished to remain anonymous wondered if some rental agencies collect the resort tax then keep it, and intends to ask for three years’ worth of records to be sure.
A critic of the ordinance told commissioners that it does not address the practice of “lending” a vacation rental to family or friends and accepting a “donation” to escape the requirement of paying the resort tax.
“There’s under-the-table transactions all the time and you’re never going to collect it all. Unless we get tipped or get lucky, it’s very difficult,” Burton said.
Professional help
The ordinance should encourage people to use a professional to manage their property, said Larry Chatt, of Island Real Estate, adding that he hopes the county will not enforce the ordinance too harshly against new, inexperienced buyers of rental property and will focus on those who are intentionally evading the tax.
“Lots of owners can handle owning a vacation rental, but others shouldn’t even try,” he said. “Those that know they don’t have the time to run a business should hire a professional.”
The ManaSota League will not include vacation rental law reform or returning tourist tax funds to municipalities in its 2015 Legislative priorities.
