DISCLAIMER - PLEASE READ: It is the owners resposibility to declare and pay the transient occupency tax on all vacation rentals of less than 30 days, if the property is located within the City of Palm Springs city limits which does have and does enforce the Transient Occupency Tax Law.

Sales Taxes

Last summer a prospective guest told us he had chosen to rent from one of our competitors because they didn't charge sales tax on the rent. This is in a resort area where summer weeks go for $3,000 and up and many owners do their own renting. The tax is 10 percent. That particular owner has rented their home out for about ten years and for only about 10 weeks per year. If you do the math you can see that they have failed to pay taxes approaching $24,000.

Certain regulations governing vacation rentals are ambiguous and unclear in many countries, states, counties and cities. But there is one thing government bureaucrats are very sure about - - they want your money and they want it now. The interest and penalties on the owner's failure to file returns or pay taxes could cost him upwards of $50,000.

Ignorance or Stupidity

Maybe this owner is just ignorant of the taxing authority. Or maybe he is trying to beat the system. But in either cases he is digging a hole that may be difficult to escape. His home is worth a good half million dollars. That means the liability is a ful 10% of the value of his home and probably 20% or more of his equity.

Maybe he is thinking he'll sell one day, not tell anyone, and just sneak away into the night. That's a bad idea too. His obligation to pay the debt will stay with him until paid. And no statue of limitations will protect him when the government proves he knew he should pay, or more importantly, that he should have known. Both make him culpable for paying the debt.

And if he doesn't get caught? During the closing process, the buyer or buyer's agent or the escrow agent should be smart enough to ask whether the rental taxes have been paid. If not, closing could get delayed for a good long time or, worse yet, the deal killed. The buyer too could be held liable for the sales taxes incurred by a prior owner. When you buy a home be sure to get an affidavit from the state indicating taxes have been paid.

Full Management Program

The Palm Springs Vacation Connection offers a complete Full Management Program which allows you to relax while we do all the leg work! We will meet the Vacationers for you, walk them through and have them sign off on our inspection approval list. At the close of the Vacation we will also repeat the process and will take digital photos of any damage or breakages and immediately email them to you. We will even arrange for maid service once guests have departed! If you are interested in our Full Management Program, email us at palmspringsinfo@aol.com for a complete list of our services and charges. We are fully licensed in California and Nevada as Real Estate Brokers.

PLEASE NOTE: At this time full management is only available in Palm Desert, Rancho Mirage and surrounding areas not including Palm Springs.