Remember that sales tax goof? Pasco wants to avoid repeat when it comes to hotels
DADE CITY — Pasco County’s tourism advisers want to avoid another $58,0000 detour.
That’s how much of Pasco’s tourist tax revenue collected by the recently opened Hyatt Place Wesley Chapel hotel ended up in the wrong location — Hillsborough County instead of Tallahassee.
“That was the ‘a ha!’ moment,’’ said Pasco Tourism director Adam Thomas “We need to do something about this.’’
What they did was jump-start an idea that had been kicking around for more than a year: Have Pasco Tax Collector Mike Fasano take responsibility for Pasco’s 4 percent tax on overnight hotel stays. Currently, the county relies on the state Department of Revenue to gather its tourist tax.
The change, approved by the Tourist Development Council last week, mirrors the collection system used in other Tampa Bay area counties including Hillsborough, Pinellas and Sarasota. The Pasco County Commission will consider the plan after a public hearing tentatively scheduled for June. If approved, it becomes effective Oct. 1.
The move comes after state and local audits revealed the Hyatt Place Wesley Chapel and 32 other Pasco businesses had been assigned incorrect county tax codes by the Florida Department of Revenue based on their addresses in Lutz or Odessa. Both of those communities straddle the Pasco-Hillsborough border. The mix-up meant sales tax payments were credited to the wrong county. And, in the case of the Hyatt Place, tourist tax dollars also were accounted for incorrectly.
Hillsborough Tax Collector Doug Belden sent the hotel a tourist tax refund of nearly $58,000 on March 1 after learning the hotel was sending its bed tax receipts to his office instead of the Department of Revenue. No other hotels were affected.
The mistakes came to light after a Land O’ Lakes retiree reported to Fasano she was charged the Hillsborough sales tax rate of 8.5 percent during a Jan. 27 shopping trip to the Tommy Hilfiger store at the Tampa Premium Outlets mall in Pasco. Hillsborough voters approved two sales tax increases in November to pay for transportation and schools and the new higher rate became effective Jan. 1. Pasco’s sales tax rate remains at 7 percent.
But geographical accuracy is only one reason Pasco is planning to rely on Fasano’s office. There also is widespread belief among Tourist Development Council members and others that not all locations offered as short-term vacation rentals are collecting the tourist tax properly.
“We know, we just haven’t gotten our hands around it,’’ said Dade City Mayor Camille Hernandez, a tourist board member..
The state reported 220 entities are collecting Pasco’s tourist tax, according to Fasano’s office. But a study by the private firm Host Compliance, shared with the county’s tourism office, found more than 1,100 listings for 717 unique rental units in March in unincorporated Pasco County.
“We certainly want to be sure people who owe taxes pay just like their neighbors pay,’’ said Fasano.
The county currently has 38 major hotels and visitors paid $384,276 in tourist taxes in March, a 26.5 percent increase over a year ago. The money can be used only for tourism promotion or construction of tourist-related attractions.
A key to using the tax collector’s office, rather than the Department of Revenue, is the enforcement powers afforded to Fasano. Tax collectors have the ability to garnish wages or place liens on property. The state system largely relies on self-reporting by hoteliers, management companies and landlords.
The switch will carry a 3 percent administrative fee, estimated at up to $80,000 in the first year, to the tax collector’s office. Fasano told the tourist advisory board he would need to acquire new software and hire an employee dedicated exclusively to the tourist tax collections. He said he expected increased tourist tax collections to offset the costs.
“I’m not here to make money,’’ said Fasano. “I’m here to make certain Pasco County gets its fair share.’’
Contact C.T. Bowen at [email protected] or (813) 435-7306. Follow @CTBowen2.