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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
El Dorado County Grand Jury
• 2002-2003
City of South Lake Tahoe Transient Occupancy Tax
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 24 findings
F1
Page 97
The City of South Lake Tahoe is inconsistent in their collection of TOTs due to the definition as to what is considered “rent.”
F2
Page 97
At present, the City is not following their own clarification along with the South Lake Tahoe Lodging Association’s recommendations as to what is to be considered as “rent.”
F3
Page 97
City records show there are 1,191 vacation rental homes in SLT.
F4
Page 97
Rental agencies handle bookings for 843 of the registered vacation rental homes.
F5
Page 97
Individual homeowners account for the remaining 348 registered vacation rental homes.
F6
Page 97
Some individual homeowners are renting their property as a vacation home without registering with the City.
F7
Page 97
Some individual homeowners are renting their property without collecting TOT. 78
F8
Page 98
TOT collected from all rental sources amounted to almost $9 million dollars in the fiscal year 2001-02.
F9
Page 98
The annual City budget is dependent on TOT revenues.
F10
Page 98
For the last two years, the City of SLT has had a budget shortfall in excess of $ 2 million dollars a year.
F11
Page 98
Reserve funds are being used to balance the City’s budget.
F12
Page 98
About $ 4 million dollars is left in the City’s reserve funds.
F13
Page 98
The City of SLT has not filled the Finance Director’s position for the last 12 months. The City of SLT as of 5/03 presently has filled the position .
F14
Page 98
The City Council is not adequately informed regarding the delinquent TOTs.
F15
Page 98
Of the five rental agencies audited for this investigation, the Investigator estimated that nearly $100,000 underpayment of TOT occurred in 2002.
F16
Page 98
It was further estimated that over $224,000 was underpaid by all rental agencies in 2002.
F17
Page 98
Individual homeowners, as distinct from agencies, may have underpaid an additional TOT of approximately $85,000.
F18
Page 98
This year the City hired an individual to audit the motels and hotels regarding payment of TOT.
F19
Page 98
In one period, from August 2002 to March 2003, this person found uncollected tax amounting to over $375,000.
F20
Page 98
Motels, hotels, vacation homes, and rental agencies are responsible to pay their TOTs owed on an honor system.
F21
Page 98
Although the City has stringent methods of dealing with delinquent TOTs, the prevailing method used is to put a lien on the property.
F22
Page 98
There are no written guidelines as to the definition of “rent” as expressed in Chapter 28A-3 of the City Code.
F23
Page 98
Some agencies and motels pay TOT on all revenue generated by the rental of the room, and others do not.
F24
Page 98
On several occasions, this committee requested the El Dorado County Auditor-Controller for assistance to investigate the initial complaint filed. The requests were denied. 79
Recommendations 8
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R1Page 99The City should immediately define the specific charges that are subject to the collection of TOT and inform the rental community so that all persons renting out properties are subject to the same rules.
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R2Page 99The City should add criminal sanctions to the City Code provision dealing with the non- payment of TOT. Such a sanction would add a tool to be used with flagrant violators, particularly those who collect tax but fail to remit it to the City.
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R3Page 99The City Council should receive monthly reports from the City Manager regarding the amount of TOT delinquencies, the length of time the facility has been delinquent and the efforts being utilized to collect those delinquencies.
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R4Page 99The City Council should become more involved with the City Manager and City Attorney in overseeing and approving legal action against businesses and person’s delinquent in their TOT payments, when it is agreed that full payment of the delinquent amount will not be made.
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R5Page 99The City should implement a comprehensive and on-going audit program of vacation rental homes. This program should include the auditing of rental agency practices and records, the monitoring of advertisements on the Internet, in newspapers and in other publications and locations, and on-site checking of rental homes where tax avoidance is suspected.
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R6Page 99The City should require vacation rental agencies to submit with their monthly TOT remittance, a copy of their internal month-end report which lists the specific properties rented, the dates of each rental, a breakdown of the total fees charged, by category, for each rental, and the dates any property was not available because the owner had blocked its use. This would allow City staff to be more proactive in their oversight duties without the need to go to a rental agency to review records. This would not create any additional work for most of the agencies.
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R7Page 99A more in-depth scrutiny by the City staff should be made of high “guest” usage homes to ensure proper collection of TOT.
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R8Page 99The City’s TOT remittance form should be changed to allow sufficient space to permit the rental agents to list the total number of units rented each day and for property owners to list the total number of days the unit was rented. 80
Agency Responses 1
Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.