Storey County looks at beefing up room tax enforcement

Storey County's room tax ordinance could get a new name and added enforcement for owners who fail to pay their share of the tax.

The amended ordinance would change the name of the tax from "room tax" to "transient lodging tax," to be consistent with the state laws regulating taxes lodging facilities, according to Storey County District Attorney Harold Swafford.

The ordinance would cover hotels, motels, bed and breakfasts, RV parks, apartment hotels, brothels and any other establishment that rents rooms or other spaces for less than 28 days.

Swafford said the 28-day limit was to protect apartment owners who charge month-to-month rent for apartments or homes.

He said state law provides for the 10 percent tax on rooms and a 10 percent penalty for each month an establishment is delinquent on its taxes, which is unchanged from the existing ordinance.

According to Nevada Revised Statute, three-eighths of the tax go to the Nevada Department of Taxation to be used for the promotion of tourism and the remaining amount to a county's fair and recreation board. In Storey County's case, that's the Virginia City Convention and Tourism Authority.

In addition, Swafford said the ordinance would allow the tourism authority to add a 1.5 percent interest charge per month on all delinquent lodging establishments in the county.

"The idea here is to put a few teeth in the ordinance," Swafford said. "It may seem harsh, but all the hotel owners and transient houses have to do is pay their taxes when they are due."

Swafford said one hotel in particular, the Sugarloaf Mountain Motel, had been delinquent for several years under the previous owner, Don Hinzpeter. The new owner is current on his room taxes.

The tourism is to use any funds from the room tax to advertise and promote the county's tourism amenities, he said.

The amended ordinance also provides for the withholding of a business license or business license renewal to any lodging establishment that is delinquent on its room taxes. If a delinquent lodging business is sold, the new owner will have to pay the taxes and penalties before obtaining a business license.

Swafford added that each day a business carries on as a rental establishment without procuring a business license will be considered a separate offense under the amendment.

The tax is payable to the tourism authority by the last day of each month.

If a lodging establishment has more than two delinquencies in a year, they will have to post a bond to the tourism authority.

The amended ordinance will be voted on after its second reading at the next commission meeting.

- Contact reporter Karen Woodmansee at kwoodmansee@nevadaappeal.com or call 881-7351.