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$1.1 million in taxes from hotels left unpaid
By Sandra Tan, News Staff
Reporter Any time visitors check into an Erie County hotel or motel, they pay a special "bed tax" for the privilege. That tax money then goes to help pay for the county's tourism and marketing-related ventures. Or at least it's supposed to. A county audit released Monday stated that from January 2000 through June 2002, the county failed to collect $1.1 million in bed tax money from more than 50 area hotels and motels. In other words, more than a third of the hotels and motels audited either failed to consistently file county tax returns or owed a large amount of money to the county in back taxes. "I think a million dollars is an unusually high amount," said County Comptroller Nancy A. Naples. "It's taxes that have been collected, it's money taxpayers have paid, and apparently someone is keeping it." Because of language in the law establishing the tax, the county would not publicly release the names of the delinquent establishments, Naples said, but she did share the list with county administrators. Calling the audit findings "a significant revenue leak," Naples said the failure for area hotels and motels to pass on the tax money they collect borders on criminal activity. She recommended that hotel operators be held personally liable for the lost tax dollars. The county typically budgets more than $4.5 million in hotel occupancy tax revenue each year, with that money going to fund such things as the county's tourism program, the Convention Center and HSBC Arena. Joseph Maciejewski, director of real property tax services, said the county will take more aggressive action against delinquent hotels and motels as a result of the audit. Administrators have already begun working with county attorneys regarding the comptroller's recommendations for tougher tax collection procedures, he said. "We are reviewing every legal option that would go so far as seizure of assets," he said. He also pointed out that some of the delinquent hotels and motels included in the audit have agreed to a payment plan, filed for bankruptcy, or are smaller bed-and-breakfasts that may do only seasonal business. The majority of hoteliers in the area remain in compliance with the county, he said. The audit showed that just six area hotel
or motel establishments owe the bulk of the delinquent taxes -- about
$860,000, not including additional penalties and interest. |
