Opposition to Ga House Bill 317, proposal to charge short term rentals a $5 per night tax

Opposition to Ga House Bill 317, proposal to charge short term rentals a $5 per night tax

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Steven Clark started this petition to State Representative David Ralston and

The undersigned hereby oppose House Bill 317.

https://www.legis.ga.gov/legislation/59359

In short House Bill 317 is proposing the addition of a nightly tax added to short term rentals in the amount of $5 a night.  This is in addition to the current sales tax and hotel/motel tax guests pay which is 12% in Gilmer, 13% in Fannin and 15% in Blue Ridge.

The language of the bill says that the funds will be used for Transportation and Transit programs throughout the state.

As short term rental owners, we understand that the Short Term Rental industry does bring more traffic to our state and understand the need for Transportation funding.    We already pay around 15% in taxes depending on the county.   4-6% of this is a county based lodging/hotel tax that gets split between the county and the chamber of commerce to promote tourism. The remaining 7% is already remitted to the state in the form of Sales Tax.  In 2021, Fannin County for instance just raised the lodging tax by a full percent.  How much more tax do the renters need to bear?

This proposed excise tax will be raising current taxes by an average of about 2.5-5% depending on occupancy rates and nightly rent. (ex. $5 in proposed tax, $150 avg night rental = 3.33% tax rate).  Of course this % would be higher for smaller cabins with a lower nightly rent, or lower for the larger cabins with higher nightly rates.

Short Term rentals are much different than Hotel Stays.  Your average hotel stay is just one or two nights so only a $5 or $10 tax.  Majority of Short Term Rentals have a minimum stay of 3 nights up to 28 nights with many stays averaging around the 10 day mark.  So you are now asking guests to pay an additional $50 to stay at a STR on top of all the booking fees charged by OTA's (Online Travel Agents) to market to them.  OTA's can charge guests 10-15% to help them find and book our properties.  So currently with OTA Fees and Taxes guests are already 25-30% of the nightly rate in fees.  Adding and additional 2.5% - 5% for this excise tax may encourage guests to look for vacations in neighboring states such as TN, NC, and FL.

Additionally a large portion of the short term rentals in this state are located in the Northern portion of Ga. in and around the Blue Ridge Mountains.  There are little to no transit projects in these areas, such as Public buses, trains, or taxis.  So we feel that this tax will unfairly benefit those in major Urban areas such as Atlanta while providing little to no benefit to those that are actually raising the income for the state.

Many argue that this bill is just being raised to level the playing field between the Hotel industry and Short Term Rentals.  I hope this isn't the case.  However, If the state is truly looking for more money for Transportation projects wouldn't it make more sense to raise the state excise tax on Gasoline sales in the state?  This way those that use the roads and other transportation services the most will be taxed for it's upkeep and improvement?  There is no need to unfairly tax short term rental guests.  Short Term rentals are providing a great service to the state of Georgia by providing more tourism opportunities that in turn bring in more revenue through the lodging taxes already in place as well as through State Sales tax collected when they shop the local economy.  Placing additional taxes on short term rentals could actually act to limit the industry and reduce tourism which in turn reduces overall revenue for the state.

We as property owners, potential renters, and other interested parties humbly ask that you vote in opposition to HB 317.


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