A new study commissioned by the City of Sonoma reveals that roughly half of local properties being used as vacation rentals have failed to comply with city regulations, according to City Manager Carol Giovanatto.
The preliminary report issued by the city – known as the Vacation Rentals Review Program, or VRRP – is brief and does not include specific addresses. But a final report will be presented to the City Council at its next scheduled meeting on Aug. 18. A list of all permitted vacation rentals will be included at that time.
The study identified 46 properties that either had not purchased the annual business license, failed to pay the Transient Occupancy Tax (TOT) or both. While a few of the 46 properties identified turned out to be exempt from the registration for one reason or another, a majority have since either ceased operating as a vacation rental or are on the road to becoming compliant, city officials said.
“Prior to the VRRP we had 26 registered vacation rental properties,” said the city manager. “Through the VRRP, we added 37 additional properties.”
Of key interest to the city is the tax revenue slipping through the cracks due to non-compliant vacation rentals. The newly identified properties were invoiced over $36,000 for their missing taxes, and much of that has been received, according to the report. TOT in the city is a 10 percent tax on the rental rate, compared to a 9 percent tax for the county TOT. An additional 2 percent tax is levied for the Tourism Improvement District (TID) that is shared with the Sonoma Valley Visitors Bureau for marketing and promotion.