Tax holiday over for waterfront rental homes, tourism chief says

2012-12-05T20:10:00Z 2012-12-06T00:21:05Z Tax holiday over for waterfront rental homes, tourism chief saysBy Bill Dolan bill.dolan@nwi.com, (219) 662-5328 nwitimes.com
December 05, 2012 8:10 pm  • 

CROWN POINT | Lake County officials have no reservations about going after homeowners doubling as hoteliers for past due innkeeper taxes.

Speros Batistatos, president and CEO of the South Shore Convention and Visitors Authority, convinced a skeptical County Treasurer John Petalas and County Auditor Peggy Katona on Wednesday that more than a dozen homes in Gary's Miller Beach neighborhood and on Cedar Lake's shoreline haven't paid their share of an innkeepers tax.

A 5 percent duty, paid to the county, is required from the hotel and motel industry.

"We would have to prove its a business and not just someone who is leasing it to a friend," Petalas said.

Batistatos provided Petalas and Katona with information gleaned from  Vacation Rental by Owner, or VRBO.com, a rental listing website featuring several Lake County homes as well as dozens more in Porter and LaPorte counties.

Petalas said he now is convinced that taxes should be collected from these property owners.

"Some of these homes have a three-night minimum rental, and you pay additional for cleaning and for pets," Petalas said.

Katona said she is willing to investigate further to determine whether the homes are paying the property tax rate applicable to rental properties, which is twice the rate for purely residential properties.

Batistatos said his tourism agency gets half the innkeeper tax revenues in the county. The tax also supports Indiana University Northwest's medical program and Purdue University Calumet's nursing program. The rest is split among the county's municipal governments.

One four-story structure listed on the website as "Ultra Luxury Beachfrnt" advertises accommodations for 26 people. It lists six bedrooms, five bathrooms and a location a third of a mile from Lake Street Beach. Its peak rate for weekly rental is listed as $4,999. It already shows bookings for 78 days in 2013.

Batistatos said he has spoken with four of the homeowners who apparently didn't realize they owed the innkeeper tax. He said they now plan to pay and that one may stop renting to avoid future tax liability.

Batistatos said 10 other homes, many of they listed in the names of out-of-state families, have declined his invitations to talk about the tax. He said he will ask the county sheriff to assist him in collecting any past due taxes.

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