By LEAH STRATMANN
The last several meetings of the South Walton Tourist Development Council (TDC) have seen inquiries into the progress of collecting unpaid occupancy or bed taxes, primarily from individuals who rent property on a short-term basis. In Walton County, the bed tax is 4 percent, meaning four cents of every dollar charged for short-term rentals, goes into the coffers of the TDC.
Joyce Sunday, an 11-year county employee, is the collection specialist with the Walton County Clerk of the Court’s office. It is her task to collect the bed taxes, as well as try and identify those individuals not paying the tax.
“The amount of unpaid tax is not knowable,” she said. “A lot of folks honestly do not know they owe the tax. Many of the owners live out of state and think Florida law does not apply to them. The location of the rental property is what matters. Most will come into compliance when we notify them,” Sunday said.
“Unless they are advertising, we have trouble finding out. Some people advertise in a very hush-hush manner and they are hard to catch.” Sunday has been successful in finding owners offering vacation rentals by monitoring the Internet. “I found one recently advertising on craigslist,” she said.
Sunday said some tax-evaders are turned in by neighbors and from time to time and rental agencies have been known to notify vacation rentals by owner (VRBO) of the county tax regulations.
“You can find a lot of them,” she said, “but you may never find all of them.” When tax-evaders are found, Sunday shares the information with the Florida Department of Revenue and vice-versa. She also works closely with her counterparts in neighboring Okaloosa and Bay Counties.
The clerk’s office is currently collecting the bed tax for the month of May. Property management companies and individuals have until the 20th day of the following month to pay the taxes. This information is also used by the TDC to determine the numbers of visitors to the area.
Sunday noted the current economic market is affecting bed tax collections as well. Although some 192 new accounts have been added since January of this year, about 20 per month are deactivated due to the sale or the increasing number of property foreclosures.
When someone is found who has not been paying the tax, the clerk’s office typically sends the owner a letter estimating the amount of tax owed for the previous three years. “We usually send a high estimate, which often brings the owner to us sooner with the proper amount owed.”
The delinquent taxpayers face a penalty of 10 percent of the tax due, with a $50 minimum. Interest rates set by the state are currently at 12 percent.
If there is no response to the clerk’s letter, non-compliance can result in a lien being placed on the property. The last resort is a freeze on the assets or outright seizure of the property. “A lien on the property will usually result in somebody paying up,” Sunday noted.
Another component of Sunday’s duties include the random auditing of property management companies, by far the largest payers of the tax. One audit of a company spanning two years resulted in more than $40,000 being collected. “We use the company’s own accounting software to pull the reports. Companies should self-audit from time to time just to verify things are being handled properly. Most of the errors found are human errors, not an intent to defraud,” she said.
Sunday is the solo enforcement person for the office, although the office recently hired an additional staff person to do clerical work, freeing Sunday to find additional revenue generating accounts.
“People keep finding new ways to try and avoid paying the tax,” she said. Individual investigations comprise most of the work. “The number is unknown and it could be well over 1,000.”