Saturday, September 24, 2011

Tax Compliance Difficult for VRs in Many Areas of the Country

This article discusses tax compliance problems in a Colorado county, but the problem is nationwide. Government organizations are using new software to find VRs and bring them into compliance.

Policies target those who fail to pay, but owners say tax system is confusing

The county has begun using new software to identify and collect unpaid sales and accommodations taxes from vacation rental owners, but some owners say they'd be happy to pay if they only knew how.

Complying with local municipal sales and accommodation tax and licensure requirements may not be as simple as it sounds, some owners say.

“I truly want to get into compliance,” said one vacation rental owner, who asked that his name be withheld. “It hasn't been clear … who is trying to collect the tax. Is it the county? Is it Breckenridge? Is it the state? I've had a business license, but there are no instructions, rules or anything about what you do. Actually collecting and delivering the taxes to somebody, that wasn't part of the explanation.”

Breckenridge's collection efforts indicate he isn't the only owner confused about the process of remitting taxes.

A 2009 town study revealed many second-home owners were renting out their properties on sites like
, but were not paying proper taxes or licensure fees. But following the study, the town was able to collect taxes from every property owner contacted, bringing in a total of $10,000.

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