Town owed $35,000 in revenue from some rental property owners
DEWEY BEACH — A recent audit of 51 rental properties showed that the town should be receiving an additional $35,000 in revenue from rental property owners who neglected to pay business license fees or accommodations taxes on their properties.
Town finance director and acting town manager Bill Brown said about $22,000 of the $35,000 has been paid so far.
“We have a tight budget and budget situation,” he said. “Every nickel we can get our hands on helps.”
Brown estimates that the town will receive $363,000 this fiscal year from the accommodations tax, nearly $15,000 more than the budgeted figure of $348,300. The town budgeted $40,000 in revenue for the rental business license fees.
The accommodations tax is a fee equal to 3 percent of total revenue from rental income that is paid on top of business license fees. On Dec. 10, the Town Council raised the business license fee for renters by 9 percent, to $142 for properties with two or fewer bedrooms, with a $11 surcharge for each bedroom over two.
Town code enforcer Jamie Burk said the audit started after the accommodations tax period ended on Oct. 15. He said it can be tough to figure out who isn’t paying because not all renters advertise the fact that they are renting out their properties.
“I know for a fact that there are people in town who are not paying accommodations tax and business license fees,” he said. “We’re trying to get people to provide supporting data.”
Burk said those who do not have a rental license are levied a $500 fine plus a late fee equal to 10 percent of the business license, while those who do not pay the accommodations tax are subject to a fine of 10 percent of what is due for every month the payment is late. After three months, the town can put a lien on the property.
Commissioner Joy Howell said council appreciates property owners being responsive to the town’s audit and hopes that large establishments in town will start paying their fair share. She said she thinks the next step is to go through other business license audits to make sure the town is receiving the revenue it should be getting.
“We’d like to hear any good ideas from the large businesses that would entail them shouldering their share of expenses for the town’s services, particularly for the $1.2 million police budget necessary to ensure public safety, half of the town’s budget,” she said.
jbleiweis@dmg.gannett.com