EDITORIAL: Short-term rentals qualify houses as inns

2012-12-11T00:00:00Z EDITORIAL: Short-term rentals qualify houses as inns nwitimes.com
December 11, 2012 12:00 am  • 

Today's topic is the ins and outs of inns. Or, to put it another way, should short-term home rentals be subject to the innkeeper's tax?

The way Speros Batistatos, president and CEO of the South Shore Convention and Visitors Authority, sees it, those houses should be taxed. He's right.

Batistatos convinced Lake County Treasurer John Petalas and County Auditor Peggy Katona last week that more than a dozen homes in Gary's Miller Beach area and on Cedar Lake's shoreline haven't paid their fair share of the tax.

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

Batistatos made the case for making these short-term home rentals subject to the tax. Batistatos provided information from VRBO.com -- Vacation Rental by Owner -- which lists rentals in Lake County as well as others in Northwest Indiana. One of the homes is advertised as having a $4,999 peak rate for weekly rental and already shows bookings for more than 100 days in 2013.

This is not a case of loaning a house to friends; this is clearly a business proposition. These homes are being rented out to paying guests, just like a hotel or motel room. Homes rented for short-term stays should be subject to taxation.

Half of Lake County's 5 percent innkeeper's tax, paid by the hotel and motel industry, supports Batistatos' agency. The rest goes to the Indiana University School of Medicine program at Indiana University Northwest, the Purdue University Calumet nursing program and to municipal governments in Lake County.

The distribution formulas for the innkeeper's tax in Porter and LaPorte counties are different.

The move to collect an innkeeper's tax on short-term rentals of homes makes sense. The owners are, in essence, turning these private homes into inns. Use the tax as a way to generate additional revenue to promote tourism in the region.

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