TOT appeal denied by Town Council

mltc4_2_14In certain zones in the Town of Mammoth Lakes, overnight rentals are legal, but owners must pay Transient Occupancy Tax. In the case of one property owner, the Town Finance Staff said he had repeatedly rented his property on a nightly basis and failed to pay taxes owed. Wednesday night, John Hopp appealed the determination of taxes, penalties and interest.

The whole amount added up to $54,281, according to Finance Manager Cyndi Myrold. She laid out the string of events that started with a warning letter in 2012 and continued with a series of citations and warnings and sporadic lack of response from Mr. Hopp.

John Hopp

John Hopp

Myrold said Mr. Hopp continued nightly rentals as revealed in sting emails by the Town inquiring about rental rates. The Council gave Hopp a chance to offer his defense. He said that in the past residents had opposed the tax. Mr. Hopp said, “In essence, I’m saying the tax is illegal. I’m not a Transient Occupancy Tax facility. It’s ambiguous,” he said. “So the benefit of the doubt goes to me.”

Councilman Matthew Lehman said the Town Attorney investigated every angle and determined the Towns TOT assessment is legal. Lehman pointed to the evidence that Mr. Hopp’s property was listed as a nightly rental on websites. Hopp claimed others pirated his information, but he did admit he had been renting nightly.

Councilman John Eastman asked Mr. Hopp why he had failed to respond to a number of Town notices. Hopp said, “I’m very busy. I’ve been in Ecuador on business and have personal issues related to the mail.” Eastman asked how he explained the fact that he was renting nightly in a single family neighborhood. Hopp said he didn’t feel the law was applicable.

Councilman Lehman concluded that Hopp needed to be aware of the laws and that TOT is a large chunk of Town revenue. He said the evidence presented made it “pretty clear this was a case of illegal rental.” Councilman Eastman said he was not sympathetic to the property owner “based on the mounds of evidence.” Council woman Bacon said she agreed. The only three Councilmembers present voted to uphold the Town’s determination and to direct the Staff to require the property owner to pay the $54,281.

 

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28 Responses to TOT appeal denied by Town Council

  1. Rick O'Brien April 3, 2014 at 7:55 pm #

    FIFTY-FOUR GRAND ??? I doubt he made that much in rental fees. So what’s next, the town put’s a lien on his property ? Not too many people can just cut a check for 54,000.00 and change…Did they figure out what the “what if ” figure would have been IF he had paid on time ? Call Larry H. Parker….he’ll FIGHT for you !

     
    • Rick O'Brien April 4, 2014 at 4:45 pm #

      I had NO idea he made that kind of $$$…OOPS !

       
  2. Desert Tortoise April 4, 2014 at 6:51 am #

    Not so fast Mr. Obrien. How many years has he been renting his place at $200 or so a night? Or was it more than that? He blew off a warning letter way back in 2012. He has revenues in the neighborhood of $250K or more for that period. He isn’t poor by any means. I wonder what he has been filing on his state and Federal tax returns? Don’t let him flim-flam the city.

     
    • Benett Kessler April 4, 2014 at 8:27 am #

      At the Council meeting, the Finance Manager said as a result of sting emails, the Town learned Mr. Hopp was charging $1,000 per night. The stated violation time was from 2009. BK

       
    • Pedro April 5, 2014 at 4:21 am #

      DT, where the heck do you get your figures or know anything about his overall wealth or obligations? Either you’re just pulling your information out of your ear, or you know enough that you should be investigated. For someone who rants about the accuracy of other posts, you sure are a consistent hypocrite.

       
      • Desert Tortoise April 6, 2014 at 8:39 pm #

        Not hard at all. From the article one knows the violations went back to at least 2012. I guesses at $200 a night, as that is the price range I have rented in. Figure two years of renting out at $200 a night. It is simple arithmetic. Now we discover from BK he was renting the place out for a cool $1000 a night. Must be a palace for that kind of cash. He made a heck of a lot more than $250K at that rate, don’t you think? Well over half a million even with the place sitting empty many nights (which I bet it didn’).

         
  3. sugar magnolia April 4, 2014 at 9:33 am #

    lots of confusing stuff here. if this is an ‘illegal rental’ as Lehman claims, then what taxes are they collecting? You can’t have your cake and eat it too. If the rental action is illegal, then there are no taxes to collect.

    Instead there should be a civil complaint regarding his illegal action and punitive damages levied after his day in court. (assuming he is found liable for his actions). The Town ordinance which disallows the short term rental of single family homes should also state how the ordinance is enforced. ie. what the consequence of illegal rental is.

    If they collect TOT, they are tacitly allowing ‘illegal’ rentals.

     
    • Desert Tortoise April 4, 2014 at 12:02 pm #

      Did prosecuting Al Capone for tax evasion suddenly make murder, racketeering, extortion, gambling, prostitution, etc., legal? No. Think through what you are writing more carefully. The guy made money renting a home. It was illegal, so on top of the likely civil penalties for what he did, he also owes the city a boat load of back TOT. How you can conflate that to making such rentals somehow legal is beyond understanding.

       
      • MK April 4, 2014 at 5:58 pm #

        Magnolia you have it right. Tortoise you have the TOT wrong. At some point this whole thing will play it out in court.

        See If you read the TOT tax code you will see. Here goes as written.

        “Transient occupancy facility” means any place, space or structure, or portion of any place, space or structure, which is or may be occupied, or intended or designed for occupancy by transients for purposes of sleeping, lodging or similar use in conformance with the town’s zoning regulations, and shall include, but not be limited to the following: hotel, hotel-motel, lodge; inn; dude ranch; apartment; apartment unit; condominium; condominium unit; triplex; duplex; single-family residence; cooperative; mobile home; dormitory; roominghouse; camping site; space where camping or remaining overnight is permitted at a campground, recreational vehicle park; or other similar structure, facility or space.

        *****************

        My Opinion below.

        OK , now that you read through you need to understand what has gone on. This law was last updated in the 90’s . It cannot be changed without a Public ballot vote as any change in who is taxed must go to a vote.

        So in order to charge TOT there must first be a Transient occupancy Facility (TOF). Then there is this limitation placed that it must be a use in conformance with the towns Zoning ordinance. Which in this case it is not. This persons house is not in a transient rental zone and even the CCR’s prohibit it’s use.

        What makes this an illegal tax is that there was no Transient Occupancy Facility.
        So therefore no tax can be assessed. Is this still an illegal operation , of course, the towns recourse is an administrative action which could lead to misdemeanor charges. But still no tax. However he does need to pay a business tax.

        Now the town attorney uses the analogy of income tax on Illegal activities like Meth sales. Well that is simple, as any income whether from an legal or illegal source is taxable. We don’t charge TOT on Meth sales as it is only a bed tax and you need to have the TOF.

        Our legislature placed the limiting words in the code because they did not want to allow this use in non zoned areas. If you go back into the Towns record you will see this. Remember the town cannot change who and what is taxed without a ballot measure. That is why we have a TBID. The TBID bypasses the usual ballot measure by allowing a Business District to asses ( tax )itself.

        But you can’t go to a hearing and BS to the folks that are deciding your fate. All the points you make get tossed in the trash. Hint hint to Mr. Hopp.

        Someday , someone will challenge this in court. We all know what will happen then. The TOML will loose.

        The most ridiculous thing is that the town is counting on these cases as long term revenue.
        There will be a point when it will be over.

        These opinions are that of the author and protected as free speech.

         
        • Desert Tortoise April 4, 2014 at 11:00 pm #

          Your argument is ridiculous on it’s face. What you are saying is that someone cannot be prosecuted for operating an illegal facility because the facility, being illegal, was not in conformance with the law and therefore the law does not apply to a non conforming business. I want to see you run that one by a judge. He or she will laugh in your face.

           
          • MK April 5, 2014 at 3:27 pm #

            Boy it’s pretty sad when you folks cannot read and comprehend what I wrote.

            I never said he was guilty of an illegal operation. I think he admitted to that.
            That he is culpable of an administrative issue only.

            What I said is It is my opinion as well as legal professionals is that the town should not be collecting the tax as they have no legal grounds for it.

            The government does not charge a cigaret tax on illegally sold POT do you?

            Can the government charge business tax on the illegal operation. But not TOT because the town placed limits on what and who they can charge TOT.
            Other towns do not have the limitations and they are free to do so.

             
        • KS April 6, 2014 at 11:04 am #

          @MK – Please note the TOML Municipal Code section 3.12.075 Failure to register (specifically part B). If he had applied for a TOT certificate, as is legally required, it would have been declined due to the zoning of his residence. However, the failure to obtain a TOT certificate made him an “unregistered operator” and section B is applicable.

          3.12.075 Failure to register

          A. Any operator who fails to timely obtain a transient occupancy registration certificate shall be in violation of this chapter and shall be subject to all of the provisions of Section 312.280, in addition to being subject to all other remedies provided by law. It shall be a separate violation of this chapter for failure to timely obtain a transient occupancy registration certificate for each month, or portion of each month, during which the operator is required to hold such certificate.

          B. In addition to the foregoing, the unregistered operator shall be liable to the town for taxes, penalties, interest and enforcement charges, imposed by this chapter which are imposed upon operator’s holding a duly issued transient occupancy registration certificate. Such taxes, penalties, interest and enforcement charges, may be collected by the town as otherwise provided in this chapter.

           
          • mk April 6, 2014 at 8:20 pm #

            You are forgetting that there is no failure to register because his operation by town municipal code definition does not need to. The only guilt that should be is zone code violation.

             
          • Desert Tortoise April 6, 2014 at 8:44 pm #

            Thank you KS. Sugarmagnolia and Mk are both full of prunes.

             
          • MK April 6, 2014 at 9:57 pm #

            @KS,

            By any chance did you happen to read the Definition of an ” operator ” is in the TOML muni Code?

            Well you need to have a Transient Occupancy Facility in order to be an Operator! look I did not write the law. However the Town has always refused to collect TOT from a SFR non- transient zoned rental property. It was only until the Litigation that the town has gone after TOT in these cases. The problem is they cannot change the words to correct the problem without a vote of the people. They could have changed the zone though.
            ******************************************************************************************
            “Operator” means the person who is a legal owner of the transient occupancy facility. “Operator” also means a person who has the legal right to possession of the premises occupied by transients. “Operator” also means any person who, through lease, mortgage, contract, license or similar legal right obtains any right to receive or collect any moneys as rent for the occupancy of the transient occupancy facility by transients. “Operator” also means any manager, agent, representative or other similar person acting on the authority of an owner of a transient occupancy facility or on the authority of any person who by reason of lease, mortgage, contract, license or similar legal right to receive or collect rent for the occupancy of the transient occupancy facility by transients, which agent, manager or representative has been authorized to receive or collect rent for the occupancy of the transient occupancy facility by transients. Compliance with the provisions of this chapter by any operator of a transient facility shall be deemed to be in compliance by all operators of such transient occupancy facility.
            **************************************************************************

            This all revolves around a “transient Occupancy facility”

             
          • MK April 7, 2014 at 11:26 am #

            Below is the wording of the county of Mono TOT law.

            “Transient occupancy facility” (or “hotel”) means any form of lodging facility the occupancy of which may be legally subjected to a tax under Section 7280 of the California Revenue and Taxation Code, or any successor state law, as the same may be amended from time to time, including but not limited to: spaces at campgrounds and recreational vehicle parks (to the fullest extent authorized by said state law); and any structure or portion of any structure, which is occupied, or intended or designed for occupancy by transients for purposes of sleeping, lodging or similar reasons, including but not limited to a hotel, motel, lodge, inn, dude ranch, apartment and/or apartment unit, condominium or condominium unit, triplex, duplex or similar structure, single-family residence, cooperative, mobile home, dormitory and rooming house.
            ***************************************************************************************

            The county does not place such limitations on a TOF as does the Town of Mammoth lakes.

            When asked to staff why don’t you just change the language of the Law to be better. The answer is that we the town cannot just change the words of the law without a Vote of the people . I asked why ” because here in CA we cannot make law or change law that would affect if people get taxed without a public vote” once again that is why we have a TBID. A type of tax like that would never have been passed by the people.

             
  4. Desert Tortoise April 4, 2014 at 9:39 am #

    Holy crap! A grand a night. Then you see the owner. The situation makes me think back to the lyrics of CCR’s old song “Fortunate Son”

    Some folks are born
    silver spoon in hand,
    Lord don’t they help themselves.
    But when the tax man comes to the door,
    Lord, the house looks like a rummage sale.

    Dude looks like he shops at the Salvation Army but he was making a grand a night on his digs, and then whines about paying the TOT. I don’t have an ounce of sympathy for this guy. Thousand bucks a night, holy moly.

     
    • Mongo the IDIOT April 4, 2014 at 1:36 pm #

      Why Mammoth at $1000 per night?
      Why not PARIS at $200?
      http://jetsettimes.com/2014/02/20/10-crazy-cool-affordable-hotels-in-paris-under-200night/

      Best to stay out of the tax dodge limelight Mr Hopp, possible next stop IRS via Ecuador Terminal LAX.

      Thank you for being an example of behavior to avoid.

       
    • Pedro April 5, 2014 at 3:58 am #

      DT, so you’re a fashionista! Maybe these lyrics from The Kinks describe you?

      “Oh yes he is (oh yes he is), oh yes he is (oh yes he is).
      He thinks he is a flower to be looked at,
      And when he pulls his frilly nylon panties right up tight,
      He feels a dedicated follower of fashion.”

      Buy some boxers and loosen up on the self righteous judgement of others’ appearance.

       
      • Desert Tortoise April 6, 2014 at 8:43 pm #

        If you ever saw me you would know I am the opposite of fashionable. I don’t have time for fashions or fads.

         
  5. bailie Mann April 4, 2014 at 4:35 pm #

    Okay, so why since 2012 did the compliance efforts really take 2 years and how much did the town pay over the last 2 years to come to this point. I mean seriously 2 years? How bad a crisis is this if staff takes 2 years to do the obvious?

     
    • Desert Tortoise April 4, 2014 at 10:57 pm #

      If the city shows up in court and cannot demonstrate to the court’s satisfaction that it did all the steps required by law before it can prosecute the case, the court will throw the case out and tell the city to go back and do all the other steps first. You have the same sort of considerations with prosecuting municipal code violations. You have to give the law breaker every opportunity the law affords to correct the problem before you sue them in court.

       
  6. John Startz April 5, 2014 at 6:00 pm #

    Town needs to wake up to the new millennium, this is 2014 not 1980 , you can not have a ordnance not allowing single family nightly rentals on one hand and ask for t.o.t. when you are renting illegal anyway, makes no sense.

    Time to change the ordinance and allow nightly rentals, collect all the TOT from it, beautify the neighborhoods with investment into older homes, put the TOT to work in town infrastructure that is in shambles due to a lack of TOT income, pretty simple economics. Its no coincidence every other ski town and most beach towns have already figured it out and changed their ordinace with the times of today call the Internet, some folks should discover it!

     
  7. Dream weaver April 5, 2014 at 7:25 pm #

    I know so many people that rent illegally. But they have found ways to fool the town, and when I have reported them , all the town had to say was “unless we see money being exchanged there is nothing we can do”…

     
  8. Curious? April 5, 2014 at 10:05 pm #

    When was the last audit of any of the towns major TOT generators?

    How many locals have been charged with TOT violations?

    Could Mr. Hopp have written every rental contract for thirty days regardless of the actual number of nights to eliminate the TOT violations?

    Mammoth, the worst real estate investments I’ve ever made ! ( Edible bumper stickers coming soon to avoid the TBID tax! )

     
  9. Mk April 6, 2014 at 10:07 am #

    The town performed a sting on Mr. Hopp. He was to rent only nightly at the sting. Then Mr. Hopp admitted to charging nightly.

    but again this I feel and know that this should only be an administrative violation.

     
  10. DosBozos April 6, 2014 at 2:41 pm #

    I will just leave this here, $1000 a night aint too bad: http://www.homeaway.co.uk/reviews/p214297vb

     
  11. Cyndi April 9, 2014 at 11:43 am #

    DosBozos – The link you provided is for a home that is in a legally zoned area. The property owner holds a valid business tax certificate and remits TOT to the Town.

     

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