Room tax law being simplified for hoteliers

Hotel and motel owners would pay smaller fines but receive a criminal record for not paying their room taxes if proposed changes to the city's lodging tax law are approved.

The Carson City Convention and Visitors Bureau on Thursday will ask Carson City supervisors to fine-tune the lodging tax law to make it more consistent, clearer and easier to enforce, bureau accountant Molly Bundy-Toral said.

The visitors bureau proposes dropping the 10-percent per month penalty for delinquent room tax paymens by lodging properties. This would be replaced with a one-time 10-percent penalty with 1.5 percent interest charged for each month the delinquency is not paid.

"What we're really doing is lessening the penalty," Bundy-Toral said. "We thought 10 percent per month is a little excessive."

Currently, no hotel/motel owners are delinquent in room tax payments, but over the years a few properties had problems paying on time.

The change brings the city's penalty in line with the state penalty for delinquent room tax payments. The convention and visitor's bureau now charges different delinquency rates for the 7 percent city portion of the room tax and the 1 percent state portion.

Carson City charges an 8 percent transient occupancy tax for people who stay at motels and hotels. Room tax makes up 90 percent of the visitors bureau's budget. Visitors paid $772,000 in room taxes in Carson City in 1999.

The room tax proposal also adds language making a lodging property owner's failure to pay room taxes a misdemeanor with a potential for a $500 fine and six months in prison. The same law applies to hoteliers who operate without a business license.

Bundy-Toral said the misdemeanor language should encourage property owners opting for bankruptcy, for example, to pay their room taxes rather than simply ignore them.

Another clause would limit the executive director's ability to waive penalties to the city portion of the room tax. The executive director would no longer be able to waive the 1 percent room tax imposed by the state.