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Council passes villagewide lodging tax

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Guests who pay to stay overnight at local hotels, bed and breakfasts, guest houses or spare rooms will soon pay an extra tax to the Village of Yellow Springs.

At its Sept. 5 meeting, Village Council passed legislation to enact a 3 percent lodging tax on transient guests who stay less than 30 days here, whether at an official lodging establishment or private residence. 

The second reading of the Village ordinance passed 3–0, with Council members Brian Housh, Gerry Simms and Judith Hempfling voting in favor, and Karen Wintrow and Marianne MacQueen recusing themselves because they both accommodate such guests at their properties.

In a late amendment to the law, those who let out rooms or homes to guests for five nights per year or less don’t have to collect the tax.

Melissa Dodd, assistant Village manager and finance director, explained the change was meant to differentiate between those who rent spaces on a “one-time or causal basis” from those operating a business.

“We know there are a lot of people that open their homes to organizations or individuals where it’s more for hospitality reasons than to run a business,” she said. 

The tax goes into effect in 2018.

In presenting the legislation, Housh explained that 80 percent of municipalities in Ohio charge a lodging tax. He added that assessing it on all local lodging rather than establishments with five or more rooms, as is the case with Greene County’s bed tax, was an attempt at fairness.

“The fairest approach would be to apply the lodging tax to all transient guest lodging establishments — whether you have one room or more, it will apply across the board,” Housh said at the meeting.

Greene County currently collects a 3 percent lodging tax on three establishments in the village: the Mills Park Hotel, Arthur Morgan Bed and Breakfast and the Glen Helen Outdoor Education Center. The new local ordinance will require these operators to collect an additional 3 percent and remit it to the Village every six months, along with a record of stays. The Springs Motel does not have to pay the local tax since it is located outside of Village limits.

While not having to pay the county tax,  anyone else in the village who rents out their homes, other properties, accessory structures or rooms in their home to transient guests now has to collect and remit the local tax. This includes those who advertise their properties on commercial sites such as Airbnb, HomeAway or VRBO. This week, nine rentals were listed within Village limits on Airbnb, ranging from $50 to $100 per night.

Housh has previously estimated the amount collected annually from the lodging tax to be around $40,000 per year. Funds raised from the new tax are required by law to go to the Village’s general fund, according to Dodd. While Council could decide to earmark the money for other projects, Dodd said the general fund is a logical place for the money.

“It’s going to support everything we pay for that supports tourism — police, streets, the train station,” Dodd said.

Those renting to guests for more than five nights per year will now also have to obtain a certificate from the Village to operate and pay a nominal fee of around $15, according to Dodd.

How to make sure locals comply with the law is still being worked out, according to Council members and Village officials at the meeting. Zoning Administrator Denise Swinger, along with the Planning Commission, will technically enforce the new ordinance, and will decide whether and how to track down those who are renting rooms but not remitting the tax, Dodd said.

Housh said that his research into other communities has revealed that typically when a lodging establishment is not paying, they are simply not aware they had to pay the tax. To pre-empt that problem, Dodd plans to spend the fall reaching out to local establishments, she said.

 A local board of tax appeals may also be revived in order to deal with any disputes that arise during enforcement of the tax, Dodd said at the meeting. Village Solicitor Chris Conard said most of the enforcement will be based on “common sense.”

“The idea is that there will be informal dispute resolution mechanisms,” Conard said. “I can’t believe there would be a situation to pull them into Xenia Municipal Court.” 

The Planning Commission will soon take up the issue of transient guest lodging in order to align language in the zoning code with the new ordinance. Housh added that the Planning Commission may recommend other regulations for private lodging establishments, which are currently considered a conditional use.

Other items on Council’s Sept. 5 agenda will be covered in next week’s News. 

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