Trinidad cuts bed tax after remembering it needs voter approval – Times-Standard
It seems that the city of Trinidad has been overtaxing its tourists over the past decade.
Trinidad City Council last week reduced its transitional occupancy tax rate from 10% to 8% after being told that the council’s previous tax increase violated Proposition 218, a law of the state that subjects local tax increases to voter approval.
In 2011, Trinidad increased the tax, which came into effect in 1992 and went from 8% in 1993 to 10%. It was not put on the ballot for voters to approve nor was there an expected increase to 12% in the first quarter of this year. That means tourists, who pay the tax when they stay overnight in county hotels and other accommodations, have been overpaying the city for about 11 years.
At last Tuesday’s council meeting, Trinidad City Manager Eli Naffah said the city would likely put the tax increase to voters in November.
“We are now putting it back at 8% because it was done correctly,” Naffah said. “So we removed that 12%, and then we attached here a resolution on that agenda item to bring it down from 10% to 8%.”
The motion, which rescinded the tax, passed unanimously with the abstention of Mayor Steve Ladwig, who had withdrawn from the vote due to a conflict of interest. He owns a short term rental.
Trinidad offers remittance and operators can remit tax at the actual rate collected or at the rate of 8% for the first quarter of this year. Amounts over 8% returned to the city will be withheld under the Ordinance’s refund protocol, which can be used by tourists who have paid over 8%.
One of the public commentators, Jonna Kitchen, general manager of Trinidad Retreats, a vacation rental company, noted that since many customers book in advance, they are charged more than the 8% tax rate. She wondered how remittances would work for them.
Kitchen also expressed frustration with how long people were paying more taxes than the city was allowed to charge.
“Whatever happens, if tourists try to get this back, or if there’s a class action lawsuit, whatever that looks like, I just want to be upfront and say it’s a difficult situation,” Kitchen said. , “and I feel like we got into this mess because a lot of people were sleeping behind the wheel. Unfortunately, it’s been going on for a long time.”
Russell Gans, an attorney with the Mitchell Law Firm that Trinidad has hired to help them resolve the issue, noted that Kitchen may pay the additional tax amount to the city, which will hold the money subject to any demands for refund submitted by tourists.
A public commentator, Mike Morgan, owner of the Trinidad Bay Bed and Breakfast Hotel, criticized the council for the proposed refund process.
“The attorney says, ‘Well, if you collected that 10 (percent), paid 10 (percent) to the city, and guests can be asked to contact the city’ well, that’s ridiculous because how are you going to check when the guest stayed… how much they were charged, how are you going to refund their credit card, are you going to write a check,” Morgan said. “It’s a nightmare you prepare.”
Morgan asked the city to send letters to businesses telling them what to do about the situation. Morgan also called on the city to adjust reimbursements for inflation and add the same penalty and fines the city would have imposed for any delay in paying them.
“A lot of this happened when no one who is at this table now was at the table,” said Trinidad council member Dave Grover. “We are not infallible, but when we see that we have made a mistake, we will do what we can to correct it as soon as possible and propose amicable solutions in which we all participate and learn from our mistakes. ”
A list of payment instructions can be found on the city’s agenda on page 43 of their packet, which can be found at trinidad.ca.gov/city-council-regular-meeting-37.
Jackson Guilfoil can be reached at 707-441-0506.