Friday, August 8, 2014

Tax dodgers: Pay up


     Taxpayers could save the city of Ketchum money by doing something simple: paying the local-option sales taxes they may owe.

     While the favorite pastime of some taxpayers is bellyaching about the taxes they pay, they could actually reduce the cost of government—and their own tax burden—by paying them.

     For example, Ketchum has suspected for a long time that not every business and individual required to collect the LOT from customers is paying up. How does it know? With lots of lodging business conducted online these days, reservations calendars are clearly visible to anyone who wants to look. Every year, it’s become clearer to the city that some owners of homes and condos that rent to short-term guests are failing to collect and remit the lodging tax.

     The city just canceled a $600,000 three-year contract with the Idaho State Tax Commission to collect the LOT. With local sales-tax revenues down, the city decided it needs a less expensive way to get the tax revenue it’s owed. So, it’s considering hiring someone to do the job, as well as to enforce other city codes.

     The city must make sure that tax levies are imposed equally or it condones an uneven playing field on which cheaters win. Even so, it’s a shame that the city even has to consider hiring a tax collector because it wouldn’t have to if liable individuals and businesses would register with the city and pay what they owe.

     Renting a home or condo out for a few days or a week is no different than renting a hotel room—even if it’s a hobby. Hotels pay up because they’re large, very visible and concerned about their reputations as good corporate citizens. Further, corporate owners usually understand that the taxes they pay come back to them in the form of good streets, public amenities, good emergency services, events and marketing that are important to their businesses.

     A welcoming and safe city benefits every entrepreneur. Tax-dodgers should save the city the cost of tracking them down, shoulder their civic responsibility and pay up.




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