Chesterton Tribune

Porter County goes to court to collect innkeepers tax

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By JEFF SCHULTZ

The Porter County Convention Recreation and Visitor Commission has decided to take legal action against three motels who have neglected to pass along their monthly collection of the innkeepers tax to the county.

Last Thursday, PCCRVC attorney Dave Hollenbeck issued three lawsuits with the Porter County Superior Court, each suit stating the businesses in question are required under a resolution enacted by the Porter County Council to collect a county innkeeper’s tax and pass on the levy monthly to the Porter County Treasurer.

Hollenbeck said the tourism commission opted a number of years ago to have the tax collected locally instead of by the state, but that means the commission must enforce the tax collection itself.

He said there are 36 businesses in Porter County that the tourism commission collects from. A monthly report is given to the tourism commission by the treasurer’s office.

The hotel properties accused of not following statutory obligation in the suits are Don’s Motel of 5500 U.S. 20 in Portage, Delux Travel Inn of 6101 U.S. 20 in Portage, and Sands Inn Motel at U.S. 20 in Beverly Shores.

According to the suit, the PCCRVC filed the complaint to seek court orders to turn the tax revenue over to Porter County.

Hollenbeck said over the past six months, a few properties have either stopped giving payments or the payments would be sporadic. He said the PCCRVC assigned him to work with those properties to get the matter resolved, which has yielded the three lawsuits of properties who have not followed through despite being sent letters notifying them about the levy.

Hollenbeck said he is unsure why the payments have not been transferred.

Both Don’s Motel and Travel Inn Portage did not return phone calls to the Chesterton Tribune. The Sands Inn Motel was not reachable by phone.

PCCRVC Executive Director Lorelei Weimer said hotel guests are required to pay a five percent innkeepers tax, just like a sales tax. The hotels collect the tax which is given to the tourism commission which uses the money for marketing and developing tourist destination sites.

Hollenbeck said questions have surfaced as to how much money is involved.

He said the magnitude of dollars is not very large since the units are relatively small, but the reason the commission is going after the funds is to correct a pattern of noncompliance.

Both Weimer and Hollenbeck said this is the first time the tourism commission has filed lawsuits to go after revenue from the tax. Weimer said sometimes hotels are late in their payments, but usually catch up. If the property is delinquent more than three times, the matter is then turned over to the attorney.

One of the reasons the hotels are unable to collect the taxes may be due to the effects of a difficult economy, said PCCRVC Board President Jeff Good.

“When the cash flow situation doesn’t work out, this is one of the first things they quit paying,” said Good who is also the owner of Good Hospitality Services. He said he feels the lawsuit is a “necessary evil.”

“If we didn’t do it, we wouldn’t be auditing the law the way we should,” he said. “It’s just a matter of getting the tourism bureau’s ducks in a row and having the necessary paperwork.”

Good did say he hopes the lawsuits will spur the properties to forward the collections in order for the matters to be resolved. Also, he said he hopes that the tourism board will not have to make further lawsuits, pending a turnaround in the economy.

The innkeepers tax is nothing new, Weimer said, noting that it is the main way the PCCRVC is funded. The tax on hotel lodgers was enacted as a funding mechanism for the agency the same year it was created by the county commissioners in 1985.

 

 

Posted 5/13/2010