How a Mountain Town Collected 36% More Taxes Than Budgeted With Host Compliance
With a growing number of short-term rentals (STRs), Truckee needed to collect the related transient occupancy tax, its third-largest source of revenue. With Host Compliance, they ensure 1,700 registered hosts can easily pay quarterly taxes.
We’ve used the [Host Compliance] data to be able to proceed with our compliance efforts.
Situated near Lake Tahoe, Truckee’s population can double on holiday weekends. With a limited number of hotels and plenty of single-family homes that are unoccupied most of the year, Truckee saw a dramatic increase in properties listed on online short-term vacation rental (STR) platforms as the market grew.
Transient occupancy tax (TOT) is the Town’s third-largest source of revenue. “It’s important that we’re collecting TOT from anybody doing short-term rentals,” said Chrissy Earnhardt, the Town’s Administrative Services Manager. Truckee uses those funds to provide general services like public safety, road maintenance, snow removal, and other enhancements like trail projects.
To collect taxes, Town staff knew that identifying property addresses and education would be a top priority. Earnhardt said it was difficult to match a listing to an address in order to contact a property owner. “We used to have to look at the newspaper for our short-term rental listings.” The process was labor-intensive and costly.
“We really didn’t know what our compliance rate was or how many listings there were out there. We just didn’t have the resources to go out and find them,” said Earnhardt.
400 Unregistered Properties Identified & Educated
Truckee turned to Host Compliance for help. Using the system’s Address Identification module, staff identified over 400 properties that hadn’t previously been registered.
Angela Martin, a part-time analyst for Truckee, uses the software daily. “Address Identification is the main tool that we use, and from there we use the letter generation,” she said, referring to the Compliance Monitoring module that lets governments send letters to non-compliant properties in bulk.
“We definitely worked with Host [Compliance] in the beginning on modifying our language in our letter outreach, getting it to line up with our specific goals in Truckee. More education and compliance focus than enforcement right off the bat.”
Truckee also added Mobile-Enabled Registration and Tax Collection. “The next phase in our implementation of Host Compliance was to [add] what we think is a great enhancement to our customer service by providing the online registration and payment platform,” said Earnhardt.
36% Increase in Tax Budget
Truckee currently has 1,700 registered properties, and all of them file tax returns. About 70% use Host Compliance’s online payment system. “Our customers, our taxpayers, are really happy about having that availability online,” said Earnhardt. She added that it has really enhanced the time that Martin has available to work on compliance efforts, with “less data entry and processing that we have to do on the payments.”
Truckee’s TOT collection for the fiscal year after working with Host Compliance came in 36% higher than budgeted. They projected the following year to be another 23% higher.
“We have a routine schedule, we’re identifying properties,” Earnhardt said. The team is also able to be proactive, she added. “Because our taxes are due quarterly, it gives us time to reach out to folks and educate them before there are any penalties involved. So if someone recently started renting and weren’t aware of the rules, they’ll get notified within that first three month period and be able to come into compliance without any additional penalties or interest due.”
“We plan to continue to identify and bring into compliance as many properties as possible.”