Mammoth Lakes Town Council held the second appeal hearing for Transient Occupancy Tax penalties and interest in two meetings on Wednesday in Suite Z. During Council’s Feb. 20 meeting, in a split vote, lawmakers waived interest and penalties for an illegal home rental. This time, a lodging industry partner, Austria Hof Slopeside Rentals owner-operator Joe Mueller was the appellant.
Mueller lost a determination in late January, the result of a late tax payment at the very end of 2012, which resulted in penalties and interest of ~$176. As previously reported in The Sheet, Mueller opened his bill from the Town on Dec. 31 last year, and missed the early closings of the Town offices and the Post Office, both of which closed at noon, resorting to hand-delivering the payment to Councilmember Michael Raimondo, who happens to be Mueller’s neighbor.
Acting Finance Director Cyndi Myrold said in her staff report that a letter was mailed to all remitters with the bill and holiday early closing hours, noon on New Year’s Eve in this case. The tax was due no later than Dec. 31, and must be postmarked or dropped off to a Town employee, who would stamp it as received that day. Raimondo delivered the check the next business day, Jan. 3, making it two days delinquent. The Austria Hof, which has been in business since 1972, did qualify for penalty fee reductions, since it hadn’t been delinquent in the past three years.
According to Mueller’s testimony, he acknowledged receipt of the letter, but said that during the busy holiday season it simply slipped his mind until the eleventh hour, literally. “I didn’t open it until 11:30 a.m. on Dec. 31, and only then did I see the holiday dates and times,” Mueller said. “We used to get a phone call, but now there’s no online, no drop box.” Mueller also protested the early closing, saying New Year’s Eve isn’t a national holiday, but rather an “extended weekend” that the Town decided to take.
Myrold said closing early on New Year’s Eve, when it falls during a week, is standard holiday procedure. Myrold acknowledged the Town has no drop box, and said she has been asked to hand carry checks in the past, but has never accepted them. Those payments, and any slipped under the Town’s door, are not deemed timely.
Wood recused himself from this agenda item, because he is Mueller’s lawyer, left the building and did not return for the final agenda item.
Council’s deliberation was short and direct. Councilmember Jo Bacon said that, having been a TOT remitter herself, and knowing that the notice was sent and later seen, she supported charging the fees. Councilmember John Eastman said he had been late filing for his company’s business license this year and paid his fines. While sympathetic, he also supported charging the fees. Even Raimondo said he appreciated Mueller’s efforts, but added there were no guarantees in his taking the check, and also backed the fees. Council voted 4-0 to let the penalties and interest stand.
Previous vote objections
Meanwhile, earlier in the meeting, public comment was almost exclusively taken up by lodging partners objecting to Council’s previous vote to forgive interest and penalties on an illegal home rental. Cheryl Witherill with the Mammoth Lakes Lodging Association said that efforts made by the TOT Enforcement Committee, first established in 2011, had recouped more than $600,000 in revenue during the past 2.5 years.
She suggested that some on Council [i.e. Wood] might not think the decision was precedent setting, but with 75 still open cases, Witherill said she considers it a potential precedent in the making.
“Why not appeal?” she asked rhetorically, concerned about an avalanche of appeals generating far too many multipage agenda items for an already overburdened Town staff to prepare. “I hope [the precedent] can be corrected, but I don’t know if it’s that easy,” she told Council.
Some in the lodging community think currently open cases could be worth a possible $1.6 million in extra revenue. Wood, however, questioned that amount, wondering if that amount is based on more general assessed dollars by the Town, and might in fact be reduced, once corrections are made pending documentation supplied by the remitters to show actual rental and income data.
Wood, in response to criticism he received from the Feb. 20 vote, said, “The way I saw it, Council wasn’t making a policy decision. It was a quasi-judicial proceeding. We sat as judge and jury, not prosecutor, and were bound by the evidence presented.
“We were presented with a false choice: enforce the penalties or the Town gets nothing,” he insisted. “The Cozens didn’t ‘beat the tax.’ We got the tax, we just waived the penalties.”
“I saw this as a $7,000 problem,” Wood said. “We collected the tax and put an illegal rental out of business.” Wood added that he thinks that just because the Cozens got away without paying penalties doesn’t mean that’s the way it will go for others.