Beach enclaves crippling tax on vacation homeowners spectacularly backfires

San Diego’s crippling tax on vacation homeowners has spectacularly backfires as it emerges it is losing around $10 million per year.Hundreds of short-term rental property owners are simply not paying the Transient Occupancy Tax (TOT).The tax, which ranges from 8% to 13.75% and impacts platforms like Airbnb and VRBO, applies to stays of 30 days or less in neighborhoods like the City of San Diego, Fallbrook, Borrego Springs, Julian, Spring Valley and areas surrounding Escondido.It was implemented to cash in on the booming vacation rental market. Instead, the owner responsibility of self-reporting has proven to be a compliance nightmare, turning what officials hoped would be easy money into the county’s single-largest source of uncollected tax revenue.According to The San Diego Union-Tribune, the county collected just $9.5 million from the tax last fiscal year from about 1,200 registered short-term rentals.But roughly 700 more properties are operating off the books in Unincorporated San Diego County.

Fallbrook leads with 114 noncompliant listings, followed by dozens in other communities.That lost revenue could nearly triple the size of the county’s controversial Community Enhancement Program, which doles out millions in grants for everything from festivals to nonprofits — often in shadowy behind-closed-doors meetings with limited public oversight. Critics argue these programs have been prone to political favoritism.Now, the very tax meant to fund them is bleeding millions.Stephen Brooks, a Clairemont resident who owns a vacation rental in Borrego Springs, claims he is doing everything by the book — and paying the price for it.

He bought the property after a memorable 30th birthday stay there and now rents it on Airbnb.But the tax eats into already thin margins.“It’s very frustrating when you’re doing something the right way and paying your fair share, and you find out there are people who aren’t,” Brooks told the Union-Tribune.His sentiment ech...