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Morro Bay City Council votes to tax vacation rentals like hotels, exempts RV parks

Posted at 11:05 PM, Aug 27, 2019
and last updated 2019-08-28 02:05:01-04

Vacation rentals in the City of Morro Bay will soon be subject to a tax like local hotels, following a decision by the City Council Tuesday night that, at the same time, excluded RV parks from the tax.

The CIty Council was considering whether to apply a 3 percent tax to vacation rentals like Airbnbs and RV parks like the TBID that currently applies to hotels.

But after three rounds of public comment on the issue, the council opted Tuesday against hitting RV parks with the tax.

City leaders use a majority of the tax revenue to fund tourism campaigns in the City of Morro Bay, but local RV campsite owners said they don't need the marketing.

Morro Strand RV Park Manager Larry Guesno spoke out Tuesday against inclusion of RV parks, arguing that his business thrives on its own.

"My park is booked full for a year and a half," Guesno said. "We do not need any advertisement."

Guesno told the Morro Bay City Council he's against the proposed tax on RV parks and his competitors agreed.

"Restaurants in town, gift shops, they're benefiting more than we would and they're not paying anything," Morro Dunes RV Park Manager Doug Claussen said.

The City Council ultimately agreed with Guesno and Claussen, voting Tuesday night to exclude RV parks from the tax.

But the city's 250 registered vacation rentals , like Airbnbs, will soon be subject to a 3 percent tax.

A member of the city's marketing team said the current strategy is to market the City of Morro Bay as a whole by using videos and blogs, which will include the accomodations that pay the tax.

Morro Bay City Manager Scott Collins said vacation rentals have already been benefiting from the city's marketing campaign and now they should join hotels in paying a 3 percent tax.

"It's a hard argument to make that it hasn't had any positive impact on their business," Collins said.

Even though his business won't see the tax, Guesno said vacation rental managers should demand proof that their tax dollars are making a difference in their bank account.

"They need to prove to whoever they charge that they're actually providing a benefit for that business," Guesno said.

The final details of the new tax are still being ironed out but should take effect at the start of 2020. Reservations made before Tuesday for future dates will not be subject to the tax, city leaders said.

The council also voted to ensure a representative of the vacation rental industry is part of the board that decides how the tax dollars are spent.

According to the city's report, Morro Bay is the last major city in San Luis Obispo County to implement a tax for vacation rentals.

Paso Robles, San Luis Obispo, Arroyo Grande, Atascadero and Pismo Beach all utilize a 2 percent tax on vacation rentals, according to the report.