Sonoma County suspends tourism fees for vacation rentals

Executives at Sonoma County’s state-funded tourism agency have suspended a plan to apply tax assessment to vacation and short-term rentals following an outcry from these smaller lodging operators.

Sonoma County Tourism announced plans in October to apply a 2% Business Improvement Area assessment to the nightly rents that vacation rentals charge guests. The move would have brought the county’s growing number of vacation rentals under the Sonoma County Tourism funding umbrella.

The 2% assessment was estimated to generate an additional $2.1 to $2.5 million in tax revenue per year, according to a report by the County Economic Development Board.

The agency’s 2% assessment already applies to large properties generating revenues over $350,000 a year, according to its website.

Sonoma County Tourism intended to use the funds to increase vacation rental marketing, said Claudia Vecchio, president and CEO of Sonoma County Tourism.

The Sonoma County Board of Supervisors was scheduled to hold a public hearing Tuesday into the proposed assessment, but withdrew the article at the request of Sonoma County Tourism.

“We don’t want to cause more angst among our partners,” Vecchio said in an interview on Monday. “There seemed to be a high level of frustration that we hadn’t heard before.”

The move comes as demand for wine country vacation rentals continues to growespecially in the middle of market and migration developments over the past two years.

Data provided by the Sonoma County Permit Department shows there are 1,822 vacation rentals with completed permits, 72 rentals in progress, 111 pending and 15 with incomplete permit applications.

However, Sonoma County Tourism estimated that there are 3,800 vacation rentals in unincorporated portions of the county, Santa Rosa, Petaluma, Rohnert Park, Sebastopol, Cloverdale, Cotati and Windsor that are required to pay property taxes. ‘accommodation.

During public comment, Eric Fraser, a member of the vacation rental community, used this discrepancy in the numbers to illustrate what he said were challenges impeding communication between Sonoma County Tourism and vacation rental operators. .

“The main obstacle, I think, to really coming together and working together has to be the dispute over facts,” Fraser said.

The tourism agency held two online town hall meetings where vacation rental operators’ frustrations “boiled over,” Vecchio told the board on Tuesday.

Vacation rental owners objected to the new charge, saying it would hurt bookings. They also wondered how the tourism agency benefits small operators compared to large accommodation companies like hotels.

“A lot of these very small traders cite types of price sensitivities,” Vecchio said in Monday’s interview. “We don’t see that in all areas. They work a bit differently than what we get the general glimpse of when they’re so small. »

Sonoma County officials continue to struggle with the balance between the growing vacation rental industry and concerns from neighbors who say the growing number of vacation rental homes is undermining the local housing stock and quality of life while complicating emergency plans for major disasters such as forest fires and floods.

Vecchio told the supervisory board that vacation rentals now make up 46% of the county’s accommodation stock, explaining why the agency wants to include that sector in the tourism levy.

Through business assessment, the tourism bureau collects about $6 million a year from accommodation operators who meet the minimum income threshold of $350,000, according to the county’s Economic Development Board.

Sonoma County Tourism’s planned $9.9 million budget for 2022-23 is also supported by hotel bed fees, or the Transient Occupancy Tax, collected from lodging operators throughout the county.

The nonprofit agency is responsible for marketing the county’s tourism industry by promoting recreation, events and tours and travel, according to its website.

Vecchio said the office has been working on the new funding initiative for two years and plans to resume conversations with vacation rental operators about the valuation in 2023.

“We have plans to try to get this group together and chart a course,” Vecchio said.

You can contact editor Emma Murphy at 707-521-5228 or [email protected] On Twitter @MurphReports.

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