Editorial: Pay Your ROT Tax Bill

By / Editorials / Wednesday, 14 September 2016 04:00

By WILLARD KILLOUGH III
Managing Editor

The Kure Beach Town Council discussed a plan at their August 16th, meeting to track down property owners that rent their beach homes to vacationers but do not pay the local Room Occupancy Tax (ROT).

In New Hanover County, short term accommodations such as hotels, motels, bed and breakfasts  must pay a room occupancy tax. Those taxes go to fund beach nourishment projects as well as tourism related expenditures and promotion. The Room Occupancy Tax Rate for Kure Beach is 6% and the combined State and County Sales Tax Rate is 7% for a total of 13% on a vacationer's bill.

The Kure Beach Council is absolutely correct. One of their duties as a governing body is to seek ways to ensure everyone is paying their share of the tax burden. The State General Assembly gave the Town the authority to levy the ROT tax many years ago and since that time it has helped the Town's bottom line while also funding vital public services.

For example, a portion of the ROT goes toward funding beach nourishment projects which in turn helps maintain wide beaches for both locals and tourists to enjoy. But not just for the recreational aspect. More importantly, to maintain a buffer from the power of the Atlantic Ocean which can ultimately threaten oceanfront property values of both residential and commercial ventures such as hotels, motels and vacation rental homes.

The ROT is also used to fund a portion of the annual budget for the Town's life guard program to protect lives of people who enjoy the beach. It's an added level of safety for both locals and visitors.

There is an economic revenue generating engine built into the ROT tax legislation. A portion of the revenues generated by the ROT are used to promote the Town as a tourism destination and another portion is used to cover tourism related expenditures that put more heads on beds in rental accommodations. That part of the legislation serves to fund activities that help increase the number of people that visit the area and in turn increases ROT revenues.

Not collecting the tax is a violation of law. If you're one of those owners not collecting that tax, you're not doing your part to help improve the community and the very tourism based economy your rely on to make your property attractive to vacationers.

The County Tax Office says the Town has 98 open accounts for ROT collection. The Town researched properties advertised for rent online and by physically driving through Town looking for places that advertise as rentals. The total identified was 241 rental properties. The Town estimates that increased collections from non-reporting properties could double ROT collections annually from $880,000 to $1.6 million.

The Council plans to discuss sending a letter to property owners during their September 20th, meeting.

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