HOLMES BEACH – Good news may be coming for owners of residential rental properties in the Island’s largest city.
Commissioners voted four to one on June 11 to exempt residential rental properties from a requirement to have a business tax receipt, with Commissioner Rick Hurst dissenting. For owners of vacation rental properties, those rented for less than 30 days, the requirement to have a BTR is in addition to a requirement to have a vacation rental certificate.
The exemption does not apply to motel or hotels for which the BTR annual fee is currently $191.44 plus $3.82 per unit.
City staff estimates there are 506 annual or monthly rental units currently with BTRs and about 1,200 vacation rental units. It currently costs $31.90 for each rental unit to obtain a BTR. Though the city pulls in an estimated $54,000 from rental unit BTRs, City Clerk Stacey Johnston says the city is actually losing funds because of the time and many employees it takes to verify and complete the applications.
For the 506 annual and monthly rentals in the city, at $31.90 each the BTRs bring in $16,141 for the city. Due to expenses from employee time without complications that need to be remedied on the application, Johnston said each BTR actually costs the city $9.55 to process, leading to a loss of $4,833.90.
She said the process to approve a BTR is a long one, involving five steps, six employees and a lot of work that takes away from the employees’ other duties.
If commissioners agree to increase the amount of the vacation rental certificate, which must be renewed every other year, Mayor Judy Titsworth said that program will gather the same information as a BTR from vacation rental owners and absorb the cost and loss of funding to the city. What commissioners will lose is the funding from the 506 annual and monthly residential rentals, which staff says won’t actually be a loss because of the processing costs to the city.
Rather than doing away with the requirement for a BTR, Hurst suggested looking at simplifying the BTR process, saying that “it just seems like this process is just too complicated” for a $31.90 fee.
Titsworth agreed that the idea has merit, suggesting staff look into what the minimum state requirements are for a BTR and if the process can be simplified. She agreed to provide a staff report with more detailed information for the ordinance’s second reading, expected when commissioners next meet on June 27.