Hocking County Will Create New Policy For Lodging Tax Enforcement

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Discussion at the Hocking County Commissioners’ meeting on Thursday focused on preparations for a new lodging-tax enforcement policy.

Hocking County Prosecutor Laina Fetherolf was present at the meeting to discuss and gather input for such a policy.

“This, in theory, will be a county policy,” Fetherolf said. Eventually, townships will likely create mirror policies of their own; but for now, the county needs to develop a policy to be in place by the end of the year.

The prosecutor’s office is contracting with Attorney Richard Hoffman to help write the new policy. Hoffman is studying the procedures of other counties.

Current policy does not allow her to enforce lodging tax collection, Fetherolf said. She can send out “nasty letters,” but so far her next step is simply to send out another letter.

“Ultimately, I can’t make policy. All I can do is enforce it,” she said.

Fetherolf presented questions Hoffman had listed, whose answers would help shape the policy. For instance, how far would punishment for failing to pay lodging tax go?

Commissioner Sandy Ogle said she wants the same treatment for everyone.

Danita Young, facilities director for Camp Akita, said she felt the camp was being singled out.

Fetherolf disputed this and said that there are other cabin businesses that have not paid lodging tax in years.

Hocking County Auditor Ken Wilson said that the Nazarene church camp pays property tax for parts of property that are not reserved for only congregational use.

An observer with the camp asked if the same has been done for Camp Akita; the camp pays property taxes. He wondered if they should receive a refund for unduly paid property taxes.

If property taxes were paid unnecessarily, Wilson directed the camp to file a formal complaint through the Board of Revision.

Wilson noted that many townships were not represented at the commissioners meeting. He suggested that a draft of the proposed policy be presented to the Township Association and the City of Logan. Perhaps a couple of public hearings on the proposed policy should be held, allowing private business owners to join the discussion.

Fetherolf believes Hoffman should have a policy drafted by the Township Association’s June 16 meeting.

Fetherolf also said Hoffman had cautioned against changing the tax policy in the middle of the year. This would “throw everyone into a tailspin.”

Some businesses escape notice. Fetherolf indicated there is no system that requires new businesses to register when they open a business or transfer ownership. The Hocking Hills Tourism Association can kick out a business if they do not pay lodging tax, Fetherolf said, but businesses are now less dependent on the association and may not join.

Wilson said his office has been working over the last two or three years on sorting out all existing businesses. Every business is required to obtain a vendor’s license. However, this is still on the honor system.

Commissioner Clark Sheets referred to the lodging tax as a “pass-through” tax: “It’s not coming off their bottom line.” In some cases, businesses might be collecting the lodging tax, but not passing it on. This is unfair to the ones who are paying, he said.

Someone noted that, in other cases, businesses might neglect to collect the lodging tax, thus lowering their prices and creating an uneven playing field among businesses.

“You’re in the lodging business, you’re supposed to be collecting this tax,” Wilson said.

Under a new policy, most likely, the prosecutor’s office will continue to be the enforcer of lodging tax collection. However, the office is unaware of businesses that do not pay until townships notify them, Fetherolf said.

The biggest confusion in past years, Wilson said, is that some businesses have thought themselves exempt from lodging tax because they were exempt from sales tax.

“We’re never going to catch everybody,” Fetherolf stated, but the county will continue to make jumps forward and catch more businesses each time. “Right now, we have a lot of people who are being slippery, and that’s not OK.”

A Camp Akita representative shared an understanding that “the township level is upset” that the camp is not paying lodging tax for its summer program. He sought to verify that the camp right now is not in breach of any law.

Fetherolf referred him to Hoffman’s ongoing analysis of the legal aspects of membership fees.

In an interview, Scot Nicoll, executive director of Camp Akita, presented a letter from Christine T. Mesirow, Chief of the Taxation Section of the office of Ohio Attorney General Mike DeWine. The letter was addressed to a township fiscal officer and was emailed on March 26, 2014.

In the letter, Mesirow wrote that, “It appears that the camp remits the lodging tax except when the facilities are being used in connection with its summer camps. If this is the case, then the camp may be in compliance with state law, and the Department would not become involved.

“This is because the Department would not view the campers’ use of the facilities to be the provision of lodging to transient guests. Instead, the Department views this as a purchase of camp activities to which the lodging is incidental.”

The letter later states that “the analysis might be different” if “the camp breaks out its charges to the campers, showing a price for activities and a price for lodging.”

Mesirow wrote, “If your county wants to pursue the issue it may, but it does not appear at this time that the Department of Taxation would impose the state sales tax on a summer camp fee that includes the lodging.”

Indicating the letter, Nicoll said, “This would tell us that what we’ve been doing is appropriate and correct.”

"We are paying tax,” he said. He indicated that the camp has been paying more taxes than legally obligated.

“We’ve been paying as a good neighbor,” he said.