Bed and breakfasts now exempt from Washtenaw County accommodations tax
Washtenaw County bed and breakfasts, including the The Library at 808 Mary St. in Ann Arbor pictured here, will now be exempt from the county's accommodations tax as it proved cost-ineffective to enforce.
From Yelp.com
The Washtenaw County Board of Commissioners voted 11-0 to eliminate the tax during its meeting Wednesday night.
This affects bed and breakfasts with 14 rooms or fewer, as well as cottages and individuals who periodically lease rooms in their homes,
The tax was first levied in 1975 at a rate of 2 percent. The tax revenue is used to promote and encourage tourist and convention business in the county, and to pay for the enforcement of the tax.
In December 2008, the commissioners had increased the taxto 5 percent from 2 percent and increased the percentage of the tax revenue the county uses for enforcement to 10 percent from 5 percent.
The Washtenaw County Accommodations Ordinance Commission recently reviewed its enforcement actions and discovered all of them were against bed and breakfasts, cottages and individuals who leased out rooms for events like university football games and graduations.
Local tax revenue collected from the businesses is typically low - about 1 percent of the total collected revenue - and it was not cost-effective to continue enforcing the ordinance for the smallest of the hospitality businesses.
At the Wednesday Board of Commissioners meeting, several Ann Arbor area bed and breakfast owners attended to voice their opinion on the tax.
Joan Knoertzer, owner of The Library at 808 Mary St. in Ann Arbor, said local businesses were given little warning before the tax was increased three and a half years ago.
This time, Knoertzer said they were contacted.
“I am very happy to support this repeal of the tax,” Knoerzter said.
Knoerzter said audits conducted on her business as a part of assessing the tax were “intrusive” and unexpected.
“We are small businesses. We support Ann Arbor to the bottom of our hearts,” Knoerzter said. “We are your ambassadors at the very local level.”
Pat Materka, co-owner of Ann Arbor Bed and Breakfast at 921 East Huron St., echoed the sentiments of Knoertzer.
Materka said the accommodations tax has been a great idea for promoting large hotels in the area, but the impact on small bed and breakfasts has been negligible.
The tax has altered the relationship between local bed and breakfast establishments and the Convention and Visitor’s Bureau, Materka said.
Materka called the audits “abusive and unnecessarily contentious.”
“Eliminating the tax will allow bed and breakfasts to go back to what they want to do,” Materka said.
Amy Biolchini covers Washtenaw County, health and environmental issues for AnnArbor.com. Reach her at (734) 623-2552, amybiolchini@annarbor.com or on Twitter.
Comments
Suzanne
Mon, Jul 16, 2012 : 7:45 p.m.
People actually pay to go to a place that looks like this? Looks pretty messy and unkept to me!
braggslaw
Mon, Jul 16, 2012 : 2:42 a.m.
I alwas like to see taxes eliminated... but I don't like to see preferential treatment
brimble
Mon, Jul 16, 2012 : 2:18 a.m.
The tax was used to "...pay for the enforcement of the tax." Really? Occupancy taxes are popular when they are passed on to visitors (read: non-voters). Look carefully at the surcharges on you car rental, hotel room, and attraction tickets in Orlando. You and the kids will pay so that Florida residents need not be bothered with an income tax. But the loss of revenue associated with the repeal will be nominal, and a layer of governmental silliness is eliminated. Win-win!
drewk
Sun, Jul 15, 2012 : 8:07 p.m.
Even better, drop the tax and let the businesses advertise for themselves..
Orangecrush2000
Mon, Jul 16, 2012 : 12:06 a.m.
No kidding.
johnnya2
Sun, Jul 15, 2012 : 7:41 p.m.
So enforcement costs are the reason these businesses will now get a tax break? I can solve that problem. If you are caught not paying, you will be subject to the tax, plus all associated costs with your enforcement.
Arborcomment
Sun, Jul 15, 2012 : 5:24 p.m.
Sorry this will not be a thumbs up post, but: most destination towns follow a tax rule for established BnBs. They may vary by number of units available, and/or the rate taxed, lots of options available to be fair to the little guy. You are running an established lodging business in A2, your guests are using A2 services paid for by taxpayers, and the guests themselves may have been attracted to stay by advertisements paid for by A2 business or government entities. As this cost is passed on, most guests don't care about the 5%. Allowing a perpetual business free ride by setting a 14 unit limit (how was that number determined?) opens the door for, shall we say, "creativity" ("why no, that's not a room I rent, that's a broom closet"). Bottom line: if you are on the web advertising to come to A2 as a BnB, then pay up (via the guests) like everybody else.
Commoncents
Tue, Jul 17, 2012 : 5:51 a.m.
You're justifying bad behavior with bad behavior. That's an insane way to argue your point. Get rid of both taxes!
Arborcomment
Mon, Jul 16, 2012 : 8:35 p.m.
Common, I am not a tax fan either but a lodging tax is an established way to get revenue. Non-BnBs pay it, in fairness BnBs should as well (perhaps with some breaks for the "little" guy). Having 28 people in your house (14 rooms double occupancy) is a business and they draw on city services out of proportion to a normal residence.
Commoncents
Mon, Jul 16, 2012 : 4:28 p.m.
Arborcomment: Just because you can get away with charging 5% on the bet that people won't do the research the tax exists or will just pay it anyway doesn't mean that you SHOULD have the tax. Do you really think just because you can get away with something it's a good idea ? That reason is ridiculous. Anyway, taxes are out of control. I'm happy to read about ANY taxes that are being removed.
oldblueypsi
Mon, Jul 16, 2012 : 10:32 a.m.
During the "academic year", the broom closet is probably a student efficiency.
Arborcomment
Mon, Jul 16, 2012 : 3:09 a.m.
Common, data on idiocy is hard to pin down. Suggest you book a room anywhere and look at hotel taxes and sales tax on your bill. Or, try to book a room in Vegas without a "resort fee" that includes same. Good luck.
Commoncents
Mon, Jul 16, 2012 : 1:49 a.m.
Do you have data that says most guests don't care about the 5% ? There must be some real idiots who will pay more than they have to for something. Less taxes - BETTER. I say keep removing other taxes and fees! This country is out of control with fees and taxes. It's nice to read about one of them finally coming down, especially in the people's republic of ann arbor! :)
Cord Bogoski
Sun, Jul 15, 2012 : 5:04 p.m.
know the county will ask for allkinds of mill increase on home owners i will give you 50 cents for your over priced house in washaway county