HOLMES BEACH – Vacation rental owners may soon have one less piece of paperwork to worry about filing in one Island city.
During a May 30 work session, commissioners began discussing whether or not to do away with the requirement that vacation rental owners apply for and receive a business tax receipt for every unit they own in the city. City Attorney Patricia Petruff said that for the small amount of income the city receives from the BTR applications from rental owners, $31.90 per unit annually, processing the high number of applications has become a burden for city staff. She said that Mayor Judy Titsworth had requested the commission discussion on the issue.
“It was a nightmare,” Titsworth said to commissioners of the processing of large amounts of BTRs. “Why continue this nightmare of trying to keep track of it all when there’s no benefit?” She added that it costs the city more in staff time to process the applications than is earned through the BTRs.
In a breakdown of the costs to process the BTRs for 506 individually owned vacation and annual rental units provided by the city clerk, with no complications it costs $41.45 in staff time to process a single BTR, which costs $31.90 for the applicant, resulting in a loss of $9.55 per BTR. The total loss to the city is $4,833.90 annually according to the supplied calculations. In total, it’s estimated the BTRs for vacation and annual rentals represent somewhere around $60,000 for the city.
Rather than charge rental owners through the BTR, Titsworth suggested commissioners consider an increase in the vacation rental certificate required for all short-term rental properties renting for less than 30 days to make up the difference in finances.
VRCs are required to be renewed every two years and currently cost $150 for the initial application and renewal. During their June 11 work session, commissioners are expected to consider an amendment to the VRC to raise the cost of initial application and renewal to $600 per vacation rental unit.
If the BTR requirement was removed from rental units, Petruff said the longer term, 30-day rentals would basically have no oversight by the city as they are not required to apply for a VRC. She said code enforcement officers would have to try to catch violators of the minimum rental period or occupancy requirements through advertising. Police Chief Bill Tokajer said that the financial impact to the city from those units, a few hundred in number, could be easily recouped through the around 1,200 VRCs issued to short-term rentals.
Commissioners agreed to consider the issue but said they want to see more information about how the loss of revenue would affect the city and how it could be made up through the VRC program.