Happy Tax Day!
While on vacation in Ft. Lauderdale, a city official in a brand-new vehicle showed up at our vacation rental to present the landlord with a demand for some extra money via a recently enacted “Vacation Rental Registration Program”. At first this seemed like a reasonable local government tax, but then it occurred to me that the owner was already paying property taxes. If the property tax is set to a rate that is adequate for funding local services, including schools, isn’t the owner of a vacation property actually overpaying already? People who come to visit for a week or two aren’t going to enroll their children in the local schools. Thus a city should be delighted that someone would turn a house that could be occupied by a family with school-age children into a vacation rental that won’t result in additional school enrollments.
Readers: What am I missing?
I know your question was rhetorical. But “tax those people that aren’t from around here — stick it to ’em good; what’re they gonna do, vote us out of office?” is commonplace. It explains all those extra fees on airport-based car rentals, amusement park taxes, and many, many others. It has nothing to do with added costs imposed on the municipality by those outsiders; they just see those outsiders like Elmer Fudd viewed Daffy Duck — fit to be roasted and eaten.
Governments are always looking for extra sources of revenue. They have nothing to do with the costs imposed. When the Mafia guys ask for protection money, they don’t consider how much it will actually cost them to provide “protection” to your shop windows. In both cases, they just make a judgment as to how hard they can squeeze you without causing you to flee entirely.
In Philadelphia now, they are considering a “soda tax” of 3 cents/ ounce , so $2 would be added to the cost of a 2 liter bottle that sells for 69 cents on sale. This is the most regressive tax imaginable but they don’t care.
Who would contest this? A vacation rental owner isn’t going to sell the property over a small tax. A vacation renter isn’t going to not rent it because its a few bucks more. Neither is likely to be a voter in the district.
The political machine is designed to separate as much money from people as possible from people for local pork with as little complaint/hassle as possible. Consider it child support on steroids.
I guess we can thank technology for all of this, making new tax opportunities like rental car taxes easy enough to implement? It’s the only reason I can think of as to why the same tactics weren’t used 50 years ago to expand the tax portfolio of every city and state…
this type of tax has been around in Reboboth Beach, Delaware for many years. We have to charge our tenants 3% occupancy tax, which we pay annually to the City of Rehoboth Beach, but I bet a lot of landlords don’t bother and are therefore skirting the law?
Hmm, maybe I’ve been in NJ too long. But the first thing that came to mind was that the city official was looking for a bribe. Maybe that is how he got his new car.
I wonder how the new-car driving local official knew that the home was being used as a vacation rental?
During the real estate meltdown, my city required banks to register all foreclosures and pay a one-time fee of something like $100. If the bank was lax on mowing the lawn, the city did it and sent a bill to the bank. If the bank didn’t pay, the city set a lien on the property.