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Santa Monica couple beats back huge TOT fine

February 22, 2013

 

‘I feel like I’ve been mugged,’ property owner says

Mammoth’s tax enforcers, charged with turning up the heat on violators of the town’s transient occupancy tax laws, thought they had a big fish on the line.

The Town Council on Wednesday night, Feb. 20, came down on the side of the fish, though, letting Kevin and Carolynn Cozen off the hook for what started out as a $98,100 bill for back taxes and penalties.

The council voted 3-2 to forgive the penalties and demand only the taxes due on the illegal single-family home rental at 382 Hillside Drive, asking for a final tax bill of $15,220.99.

The council’s action in favor of the Santa Monica couple, supported by council members Rick Wood, Jo Bacon, and John Eastman, came over strong objections from Mayor Matthew Lehman and council member Michael Raimondo.

The vote followed testimony by both the Cozens, who argued they were blindsided unfairly.

“I feel like I’ve been mugged,” said Kevin Cozen, who added he had been coming to Mammoth since he was 11 years old and had a lifelong love for the town.

But, he said, “the way this went down was very disheartening and very unprofessional.”

Cozen gave his side of the case at length, saying he and his wife never intended to skirt taxes, and had even called the town offices to inquire how to pay up. He also said he did not know that Mammoth had a law prohibiting single-family home rentals.

“We never thought in a million years that it wasn’t legal,” he said.

He said he did a search on the Internet site Vacation Rentals by Owner (VRBO), and noticed other people were charging a 13 percent tax, but did not know exactly what that was for.

“I called the [town] after a short time, and I asked to pay the tax, and I was told that there was no tax on short-term rentals on a single-family dwelling in Mammoth.

“With that said, we stopped charging the tax and we continued to rent the house, we thought everything was fine.

“We were approached by the city about six months before this whole thing went down, and I started talking to neighbors, and even the person at the [town] who I talked to, when I called back, was very, very relaxed about the enforcement of this.

“They told me they weren’t sure how enforceable it was, it was being fought by neighbors, that it might go away and it was very, very lax. So it let the steam out of it for me.”

Finance Manager Cyndi Myrold walked the council through her version of the events at the start of the proceedings, outlining the process that knocked the $98,000 bill down to $22,435 because of a reassessment on the property.

Yet after hearing the Cozens’ story, the council—it is the judge and jury in such cases—deliberated; the members did not ask any follow-up questions to the town staff.

No one, save Lehman, pushed back.

“I can appreciate the situation that the property owners are in,” Lehman said, “and I’ve heard a lot off different comments from property owners who say times are tough, they need to rent their house, they didn’t know they couldn’t, all these different things.

“But the reality is that times are tough for everybody up here.

“We all love Mammoth,” Lehman said. 

“I think the people who rent condos out legally love Mammoth as well.

“The reality is that we love it enough that I like the snow removal; I like having parks and police officers and everything else, and TOT is almost 70 percent of the tax that pays for that in this community.

“When somebody rents out a home illegally and the tax doesn’t get paid, unfortunately, the town doesn’t receive any money for that, and at the same time, they are taking away business from a legitimate business in town.

“TOT was collected on this property, so clearly it was known that there was tax due, and somewhere it should have come up that this wasn’t legal.

“I have zero tolerance [for this]. Until the law changes, we have to uphold that law. If we start bending on this rule, we start randomly affecting everybody else in the community.”

Wood, an attorney, was more lenient.

“I think it’s significant there is no rebuttal testimony that contradicts the statement that when these folks voluntarily called to get a business license and pay the tax, were told there was no tax to be collected.

“Other than the rentals that they had committed to, they didn’t rent any more. Therefore I think the Cozens should pay the 

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