Small lodging owners protest new room tax
September 14, 2010
A proposal to implement a 3-percent transient lodging license tax in Douglas County prompted a strongly worded letter from Genoa House Inn owner Keith Corbin.
Corbin’s was one of two objections the county received. County officials sent out more than 440 copies of the business impact statement.
The increase in the lodging tax has been supported by county business organizations, including the Tahoe-Douglas Chamber of Commerce, the Business Council of Douglas County and the Carson Valley Chamber of Commerce.
The county hopes to raise $1.26 million to use to encourage tourism and to increase the money going to the county’s parks.
Corbin pointed out he only has three rooms and that the new tax will cost as much as his power bill.
“With the addition of this new tax, the total room tax will make this category the second highest expense in running Genoa House Inn,” he wrote. “It will be an amount equivalent to the cost of all utilities, NV Energy, Southwest Gas, Charter Communication and Douglas Disposal combined.”
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Corbin said the bed and breakfast can’t offset the lost revenue by shifting costs to elsewhere like larger operations can.
Corbin said that by increasing the price of lodging, the result will be a decreased occupancy rate.
He said that so far the county’s promotion has coincided in a 10-year decline in occupancy.
“A 2 percent increase in these taxes is actually an adverse effect for business, throwing good money after bad,” Corbin said. “The board has offered no explanation why spending $2.3 million a year on tourism is not producing results.”
Both Corbin and Glenbrook resident Karen Nelson requested waivers of the tax. Nelson owns a cabin at Lincoln Park.
Nelson said the new tax will force her to reduce her rental income to remain competitive.
She pointed out that there are several rental owners at Lake Tahoe who are not signed up to pay occupancy taxes and those owners are benefitting.
“Why should I have to pay taxes of 13 percent when there are people going tax free?” she asked.
Nelson said that rather than pay the tax, she will rent her cabin on a long-term basis.
The petitions are up for discussion at the commissioners’ Thursday meeting.