They Don’t Just Want Your T.O.T

Dear Sir,

I am a condo owner at SnowFlower; we have received a form from Mono County For Personal Property Business Tax.

What is this all about? In all the years of ownership, more than thirty, we have never received such a form or been told that we will be taxed on the personal property within the condo.  

The Condo is on a rental program and the rental service requires furniture, such as beds, couches, chairs, tables, T.V. etc.

Can you look into this new tax and enlighten us as to why!

          Roger A. Harris  D.D.S.

The belated reply, courtesy of Mr. Page:

Mammoth Lakes rental owners take heed: if you’ve been renting out your property and haven’t paid attention to your status with the assessor’s office, your tax liability  may be more than you initially thought. 

Typically, furniture and the other contents of residential dwellings aren’t subject to property taxes in any capacity. However, that exception changes if the property in question generates income (i.e. renting out a condo) and the contents of that property become subject to what’s called Personal Property Business Tax. 

The tax takes into account the value of a property’s contents, either declared or estimated by the Assessor’s office.

Before anyone decides to light the torches and grab the pitchforks, they should know that this tax currently sits at 1% of that declared value amount; if the contents of a rental property come out to a $1,000 value, the additional tax would be $10. 

As Barry Beck, Mono County Assessor, explained, “If someone’s renting their condo, all the contents become business personal property.” 

Beck did note that high personal property tax amounts are usually related to short-term or nightly rentals: “Typically, long term rentals have little or no business property,” said Beck. He referenced the ease of renting out an already furnished and equipped property, given that short-term renters would want those things taken care of when they move in.

“It’s not that we didn’t feel like assessing it in the past,” said Beck, “When that information became available [as a result of the town’s enforcement efforts], we were required to enforce that”.

If you’re a renter who previously hadn’t filed the proper paperwork with the county, then you may have already noticed this tax on your list of taxes, in which case you may have already contacted the assessor’s office seeking answers. As it turns out, the uptick in personal property business taxes on people’s tax forms is tied into an effort by the Town of Mammoth Lakes to collect taxes on businesses in town. 

Danny Earls, Revenue Accountant at Town of Mammoth Lakes Finance Department, explained that condominium renters are regulated under Tax Schedule F, which differs from the tax schedule for higher occupancy lodging like hotels and campgrounds. As Earls explained, “That’s not just short term, it’s also long term. If you have two or more long term rentals, you have to get Schedule F. It’s not like you’re renting out a room in your house; if you have two or more, you’re a business.”

Beck’s office received the first compiled list of all TOT (Transient Occupancy Tax) accounts from the Town of Mammoth Lakes Finance department in 2017. That year, “we added about 1,000 [businesses] that we were unaware of that were doing nightly rentals,” said Beck. “When the town cracked down, they found all that stuff.” 

The Town was able to determine these unregistered nightly rentals through the services of Host Compliance, a consulting firm that “helps municipalities understand the scale and scope of the impact of short-term rentals and enact regulations.” As Beck said, “They’re putting in a great deal of effort in terms of staying up to date”. 

Sheet: Is it illegal not to declare an intent to use a property for income? 

Beck: It’s illegal to lie but there’s really no penalty. There’s a ‘true and correct’ statement on the form, but unlike other forms, checking that box on this form does not equal perjury if the information therein is false. 

Sheet: So it’s frowned upon? 

Beck: Yeah, frowned upon.

The Town of Mammoth Lakes defines illegal activity as “any rental activity that is not consistent with the Town’s Zoning Ordinance, or any rental activity that is not compliant with the Transient Occupancy Tax Ordinance … it can also include transient rentals in a zone where it is permitted, but the operator does not have a valid Business tax certificate or a valid TOT Certificate or is not remitting TOT and/or TBID to the Town.” 

If you don’t have that TOT certificate and you’ve been renting, you’re probably going the town’s “naughty” list, in which case, you’ll be getting a form from the Assessor’s office that features a section for declaring the value of any business personal property. 

Beck noted that this can cause some people to balk as there’s a concern “that the bank would see this document and would then refuse or want to subtract something from their loan.” But as Beck pointed out, the form does not go to the bank, it goes to the clerk recorder and remains confidential. In the event that the form is not returned, the assessor’s office estimates the value of the business personal property. 

Both Earls and Beck reported that they had received numerous calls from hosts regarding the tax line. “We didn’t enact the tax, it’s in the county tax code”, said Earls, who also noted that TOML was not the entity who sent out the new form. 

“It’s not a ton of money that we gain”, said Beck, “but it is a matter of fairness for the folks who have reported their property.” As it presently stands, approximately 3,100 properties are on TOT list at the assessor’s office, with a total generated tax revenue in $30,000 range.