Bed Tax Compliance

As the “Hostess City of the South,” it’s no surprise locals joined the trend and literally opened their homes to some of our city’s guests.
We have seen an influx of rooms, homes, and apartments for rent over the last five years, and I think it’s a great option for Savannah’s visitor to experience this city like a local.
However, when money is exchanged between the homeowner and the visitor, a new business has emerged.
If you are one of the hundreds of people offering a room or home for 30 days or less, let me be the first to welcome you to the tourism industry.
You are now a part of an industry that provides tremendous value to our community. We afford jobs and tax revenue that allows all of us locals to enjoy nice restaurants, great shows and festivals, shopping, safer streets, not to mention beautiful parks and walkways. (If you’re having a hard time remembering what it was like without tourism, remember Savannah of the 80s and 90s.)
So, now that you’re a tourism business owner, you’re subject to the same local and state laws that regulate lodging.
Lately, this issue has caused the City of Savannah a headache. Our leaders must figure out how to zone short-term rental properties. On top of that, they have to determine who is operating this kind of business and ensure those businesses are complying with the state tax code.
It’s a complicated issue no doubt. If you’re new to short-term rentals, I encourage you to educate yourself and get involved. If you don’t have the time or resources, join an organization that does.
My organization, the Tourism Leadership Council got involved in this issue when a group of my members came to me concerned they weren’t being heard.
These small business owners manage and own short-term rental properties. They have a business tax certificate. They pay the appropriate taxes.
They felt they were being undersold because so many other places could rent for much cheaper because other businesses aren’t pay state taxes.
On a $100 room, that’s $13 in taxes--$7 in sales tax and $6 in bed tax—each night that room was rented. That adds up quickly.
Together, we asked the city to come up with a game plan to bring short-term rentals, across the board, to compliance of state code.
For one year we waited and these small businesses dutifully paid their taxes. On Wednesday, we met with city leaders and the process is barely creeping along.
It’s typical for things to move at this pace, there are many factors that go into these regulations.
But if you’re a member of the general public or if you’re a legitimate business paying taxes, then you have every right to be upset. There are tax revenues uncollected that could be used on infrastructure, police, and other necessities that make our city run.
When this issue is resolved, there will be more resources for our community and for our destination marketing organization, Visit Savannah.
At the Tourism Leadership Council (TLC), we take this very seriously. We are a non-profit organization that advocates for the tourism industry, and we want to be known as an industry that plays by the rules.
When we, at the TLC, take on an issue, we don’t blindly advocate. We’re looking at responsible furtherance of our industry.
Hundreds of types of businesses have different requirements that are imperative to operate—it’s the nature of business.
As we grow this industry, by literally opening our doors to the city’s guests, let’s work together.

Tuesday, March 11, 2014