Short-term rental tax issue causes rift | Local News | – Mountain Mail Newspaper

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Tentative talks about a reduction in short-term rental taxation rates have revealed a split between STR owners and managers within the county and community members who support the current taxation level. 

Salida City Councilman Justin Critelli said during the Dec. 18 work session that lowering STR taxation rates would make it appear that council is succumbing to the tactics used by the STR community in November. 

It was iterated during the Dec. 18 work session that 62 percent of STR owners do not live in the county. 

Other council members said they supported lowering the nightly lodging tax to $10 per room per night, or lowering both the per-room/per-night tax and the initial licensing tax. 

Jessica Wierzbinski is the owner of Stay in Salida, which manages STR properties that are not eligible to be a long-term rental because the property owners live on site for a portion of the year.

She said, “When the lodging tax increase went into effect, we passed that tax along to our guests as a line item so they could see that it was a citywide tax. We have had several prospective guests tell us they’re going to find a different mountain town to visit rather than supporting a town with exorbitant taxes. Our bookings have definitely gone down since the tax hike, and with folks choosing to vacation elsewhere, I think the entire city’s economy has taken the hit.” 

Aimee Tihonovich, finance director for the City of Salida, said comparing numbers from 2022 and 2023 becomes nearly impossible when taking into account that lodging and STR taxes are no longer treated the same way, nor are all STRs coded the same way in NAICS (North American Industry Classification System) codes. She said most STR owners pick the code “accommodation and food services,” while others pick “real estate, rental and leasing.” 

She ran the numbers for The Mail and said, “Based on that analysis it appeared most STRs are identified within the following subsectors: Bed & Breakfast, all other traveler accommodations or lessors of residential buildings and dwellings. Sales tax for that group was $250,554 in 2022 and $245,079 in 2023, a 6 percent reduction.”

Tihonovich said that “we can’t draw clear conclusions for the reason behind this; it is a bit of a stretch to simply blame the STR tax increases (for sales tax being down between 2022 and 2023) because there are so many factors going on in the economy.” 

Wierzbinski said she is not against taxation of STRs in the community, and she’s glad to see the funds are being earmarked for affordable housing initiatives in the community. 

“But, if the tax level is so high that it’s driving our visitors away, then it’s counterproductive,” she said. 

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