The Chairman of the Mammoth Lakes Lodging Association called the Town Council’s recent decision to forgive fines and penalties on unpaid transient occupancy tax a “scary precedent.” John Morris said the Town Council needs to take a good look at what they’re doing.
In February, the Council heard an appeal from second homeowners, Kevin and Carolynn Cozen. Town staff said they failed to pay $15,000 in Transient Occupancy Tax, illegally rented their single family home and should pay fines and penalties of $7,000 as a result. The Cozens claimed they called the Town Office and were told single family homes did not have to pay TOT. They could not say who they talked to. The Cozens did say they got the idea that they should charge TOT so they did. They just never paid it to the Town. Three members of the Town Council voted to let the Cozens off the hook of fines and penalties. Mayor Matthew Lehman and Councilman Michael Raimondo strongly disagreed.
Lodging Association Chair John Morris pointed to history. He said two and a half years ago the Town Council asked the Lodging community to help with TOT enforcement and control of illegal renting. He said Lodging, the Town Finance Department, Tourism and the Mayor worked out fines and rules. Then, Morris said, the first appeal they got, the Town Council folded. Morris said, “This was their chance to send a message. The Cozens admitted renting their property. They got caught.”
Morris said there was no real evidence to back up the Cozens’ claims that someone in the Town Offices told them they didn’t have to pay bed tax. He said, “It was an excellent chance for the Town Council to set the tone for future cases.” Morris added that the Cozens escaped fines when all of the lodge owners who pay TOT get fined, said Morris, “if we’re five minutes late.” He said lodges are continually audited and regulated.
Morris also pointed out that people who rent their homes illegally do not, as a result, pay for snow removal and other Town services. He estimated that the Cozens likely made around $120,000 in gross rent and in the end paid some $15,000 in TOT and no fines or penalties. Morris said other cases are coming up. He said he understands at least a half million in fines are pending in cases that are still out there. Said Morris, “I hope the Town Council takes a good look at what they’re doing. They have set a scary precedent.” Morris did say he is neutral on the issue of single family home rentals. He said he would like to see a study done to show the net positives.
Meanwhile, at Wednesday night’s Town Council meeting, Joe Mueller of Austria Hof Slopeside Rentals will appeal a $157 fine the Town charged him. In his case, he tried to pay his TOT bill the day it was due, December 31st, but the Town Offices were closed and so was the Post Office. He delivered his payment to Councilman Michael Raimondo who handed it over to the Finance Department on January 2nd. Mueller disagrees with the fine.