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Town reverses course on tax

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  • | 4:00 a.m. October 21, 2009
  • Longboat Key
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Two Longboat Key boat-slip owners fought the town’s controversial business-tax-receipt program, and, as a result, the town will now lower its tax.

Longboat Key resident Susan Rinehart and Sarasota resident Barry Lewis filed appeals to Town Manager Bruce St. Denis, after the town announced this summer that boat slips that were rented out would be added to the business-tax-receipt roll.

A business tax is required for all Key business owners and must be renewed annually Oct. 1.

In particular, 194 boat-slip owners at the Boathouse Marina, 408 Gulf of Mexico Drive, and the 270 boat-slip owners of Longboat Key Club Moorings Marina, 2800 Harbourside Drive, received letters and invoices this July informing them their slips would be assessed a $103.95 charge annually if they rented their boat slips.

But when the tax was assessed to the 308 boat slip owners who said they rent out their slips, Town Clerk Trish Granger said only $10,343 of the $29,923 that was billed was collected by Oct. 1.

Lewis, who owns 15 boat slips at the Boathouse Marina and rents out 14 of them, was irate when he received his invoices totaling $1,4055.30.

“It’s preposterous,” said Lewis, who felt that if he had to be assessed a tax, it should be one tax only instead of 14 individual taxes.

Lewis, who already pays the town a business tax to be a real-estate agent on the island, hired an attorney to dispute the charges.

Rinehart, who could not be reached for comment, also appealed to St. Denis in an e-mail last month, explaining it was ludicrous to be charged $103.95 when those who rent their homes or condominiums only pay $33.60 per year.

Wrote Rinehart: “The amount of the tax for which these slips have been classified is quite high in relation to the actual amount of money that they (the boat slips) can generate.”

It turns out, St. Denis agrees.

At the Town Commission’s Thursday, Oct. 15 regular workshop, St. Denis recommended that the business tax be reduced to $33.60 per year for slip owners.

“I agree that the difference in revenue generation was too high,” St. Denis said at the workshop. “We overlooked this charge when we added the boat-slip owners this summer.”

The commission agreed to forward a revised business-tax-receipt charge list to its Monday, Nov. 2 regular meeting for first reading and public hearing.

If approved on second reading in December, boat-slip owners will be refunded the difference for the tax levied against them. And the town will now generate $10,348.80 for the 308 boat slips who receive business-tax receipts, instead of the approximately $30,000 the town would have generated from the higher tax levy.

Lewis, who has previously refused to pay the tax, was glad to hear about the change and said he will now consider paying the taxes on the slips.

But Lewis is still upset with the tax itself, regardless of the levy charged for his slips.

“I have had people tell me they won’t continue to rent my slips if they have to pay any tax,” Lewis said.
“They tried to take an old law and add us boat-slip owners to the law to make more money.”

This isn’t the first time the town’s business-tax receipt has been disputed.

Last summer, the Town Clerk’s office sent business-tax applications and collection forms to each individual unit owner of Casa del Mar and The Colony Beach & Tennis Resort. It was the first time in more than 15 years since the town’s tax, formerly known as an occupational license, was levied against the two resorts.

Both Casa del Mar General Manager D.M. Williams and Colony General Manager Katie Moulton said unit owners were confused and upset to see the bills.

Owners of both complexes received a bill in the mail for a annual daily rental business tax of $86.10. In the past, the two managers said, only their realty offices and any respective businesses on their property have paid the tax.

Unit owners at both resorts flooded Town Hall with letters and phone calls because they didn’t believe they should be levied the tax because they didn’t operate a business.

And, now that the Colony has suspended its hotel operations, the town has agreed to refund the tax to the 234 unit owners. The loss of the Colony business-tax-receipt income for the town is approximately $6,000.

The additions of the two resorts and the boat-slip owners who rent their slips has allowed the business-tax-receipt program to rise from $140,934 in 2006 to $175,361 in 2008, for a 24.4% increase.

When asked whether he thought the town’s business-tax program should be discontinued, St. Denis said the tax “is not a insignificant amount of money the town collects.”

“If the town doesn’t have a tax on businesses, you need to either generate money somewhere else or cut a service the town provides,” St. Denis said.