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Business owners won’t get break on fees

Business owners won’t get break on fees

Written by SUN contributor on . Posted in Community News, Holmes Beach.

HOLMES BEACH – After discussing eliminating the fees for business tax receipts in the 2020-21 fiscal year, commissioners are now leaving the fees intact and considering lowering property taxes instead.

During a May 12 work session, commissioners brought their previous decision to eliminate the BTR fees for commercial and home-based businesses back to the table and reversed it, reinstituting the fee.

Mayor Judy Titsworth said that if commissioners want to eliminate the fee for one year, it would still cost the same amount to operate the program, revenue that would need to be made up in a different way. She added that eliminating the BTR fee for a year wouldn’t financially help vacation rental owners.

Commissioner Carol Soustek said that she’d like to find a way to help more people than just business owners. She said that she doesn’t feel like the city can ask for a tax increase in the coming fiscal year and that she’s concerned about giving away money when the city’s leadership isn’t sure that there will be enough funds to operate at current levels.

Commissioner Kim Rash said that eliminating the BTR fees only gives a minimal financial break to business owners and sets a wrong precedent for other people in the city.

Commissioner Terry Schaefer said he was still in favor of eliminating the BTR fee for one year and wants to see the city’s leaders make up the lost revenue by cutting spending. His fellow commissioners agreed that cutting spending for the next fiscal year is a goal, but Commissioners Jim Kihm, Pat Morton and Soustek said they’d rather use the rollback rate for property taxes and reduce or keep taxes the same for property owners in the coming year rather than eliminate the BTR fees for one year.

“We need to come up with a reasonable budget and reasonable ad valorem rate that applies to everyone,” Kihm said.

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Biz tax changes take shape

Written by SUN contributor on . Posted in Community News, Holmes Beach.

HOLMES BEACH – Good news may be coming for owners of residential rental properties in the Island’s largest city.

Commissioners voted four to one on June 11 to exempt residential rental properties from a requirement to have a business tax receipt, with Commissioner Rick Hurst dissenting. For owners of vacation rental properties, those rented for less than 30 days, the requirement to have a BTR is in addition to a requirement to have a vacation rental certificate.

The exemption does not apply to motel or hotels for which the BTR annual fee is currently $191.44 plus $3.82 per unit.

City staff estimates there are 506 annual or monthly rental units currently with BTRs and about 1,200 vacation rental units. It currently costs $31.90 for each rental unit to obtain a BTR. Though the city pulls in an estimated $54,000 from rental unit BTRs, City Clerk Stacey Johnston says the city is actually losing funds because of the time and many employees it takes to verify and complete the applications.

For the 506 annual and monthly rentals in the city, at $31.90 each the BTRs bring in $16,141 for the city. Due to expenses from employee time without complications that need to be remedied on the application, Johnston said each BTR actually costs the city $9.55 to process, leading to a loss of $4,833.90.

She said the process to approve a BTR is a long one, involving five steps, six employees and a lot of work that takes away from the employees’ other duties.

If commissioners agree to increase the amount of the vacation rental certificate, which must be renewed every other year, Mayor Judy Titsworth said that program will gather the same information as a BTR from vacation rental owners and absorb the cost and loss of funding to the city. What commissioners will lose is the funding from the 506 annual and monthly residential rentals, which staff says won’t actually be a loss because of the processing costs to the city.

Rather than doing away with the requirement for a BTR, Hurst suggested looking at simplifying the BTR process, saying that “it just seems like this process is just too complicated” for a $31.90 fee.

Titsworth agreed that the idea has merit, suggesting staff look into what the minimum state requirements are for a BTR and if the process can be simplified. She agreed to provide a staff report with more detailed information for the ordinance’s second reading, expected when commissioners next meet on June 27.

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