MONO COUNTY SCREWS LODGING COMMUNITY
In November, constituents in both Mono County and Mammoth Lakes voted to up the Transient Occupancy Tax (TOT) rates in their respective entities this year, but the implementation of the rate upticks has differed.
As a reminder, TOT is a local tax placed on hotel and short-term rental stays. The county elected to increase its rate from 12% to 15% (Measure K), and the Town decided to increase its rate from 13% to 15% (Measure L). Both ballot items were approved.
The lingering question, though, is what will happen to reservations which were booked prior to the increase. Event planners for ski teams, weddings, and festival-goers frequently book expensive stays in advance; sometimes years in advance.
Do you then tell those people they owe 2-3% more on their invoice? Or do you make an exception, and lose out on tax dollars that were promised to voters?
As Don Morton of June Lake Accommodations wrote, “Our vacation rental company takes reservations up to a year out. This is done to stimulate bookings to increase return guest/clients.
Mono County makes the date of the tax due on the date of the stay. Unlike Mammoth Lakes, that made the tax due on the date of the reservation was made.
We have tried to reach out to collect the tax increase. Most of our guests do not understand and think we are just ripping them off and trying to steal from them. AirBnB and VRBO will not assist us at all, saying once a reservation is made and paid for, it is a done deal. These same guests are not inclined to leave a decent review.
The long and short of it is we have to eat the tax increase on reservations made before the official tax increase eventually went into effect.”
Indeed, Morton is correct in that the county and town went in different directions: the county went by check-in date, the Town went by booking date.
By collecting based on the booking date, the Town anticipates it will collect less revenue than owed during this implementation period, but “this loss would be insignificant over the life of the tax measure,” staff wrote.
Mammoth’s Council discussed the item in their December 16 meeting. In that meeting, Council decided the change date would apply to bookings after January 1.
“It is the fair thing to do for customers who have already contracted or booked rooms,” Councilmember Bill Sauser said at that meeting.
The County, on the other hand, did not ever discuss the implementation date … it’s included in its code that “the transient shall pay the tax to the operator of the transient occupancy facility at the time the rent is paid,” according to Section 3.28.060.
This policy has been in place since 2004 and wasn’t changed as a part of the TOT increase, County Administrator Sandra Moberly said in an email to the Sheet.
The county is “looking to review this ordinance for potential changes in the future,” but it hasn’t yet set a date for the Board’s discussion, Moberly said. The County ordinance became effective on December 20, ten days after the election results were certified on December 10.
To give credit where it’s due, raising the TOT means different things for each municipality based on their separate economies, said Lynda Salcido, Mono County Board of Supervisors Chair.
“The number of TOT generating facilities in the county is minuscule compared to the town, It’s a different market,” she said.
According to the ballot prompts, the County’s increase will bring in just over $1 million in additional funds annually, where the Town’s increase could mean an additional $4 million
The town also monitors their TOT properties through its Certified Properties Program to make sure all affected businesses are informed and legal, Salcido said. “The county doesn’t have anything like that – the TOT goes directly to the finance [department] and finance applies it to the right account.”
Salcido said she’s not personally been contacted by anyone about the implementation process, but said that’s likely because her district is in Mammoth and so that was covered by the town’s increase in the TOT.
At next week’s Board of Supervisors meeting, the Board will hear a resolution to allocate the additional 3% entirely to housing programs.
