City Council members were told Tuesday that charging all Short Term Vacation Rentals (STVRs) a commercial tax rate could add up to $253,000 per year to the city coffers.
The city is considering whether those who operate the rentals in commercial zones should be paying at a 40 percent rate of assessed value rather than the residential 25 percent rate.
Ms. Haley said 336 parcels were identified as rentals in commercial zones still being assessed at 25 percent.
She said the city might be limited on certain collections, including the 11 parcels that are in TIFs (Tax Increment Financing zones) and those in multi-family.
City Attorney Phil Noblett said the Tennessee Court of Appeals at the end of June ruled that it was appropriate for Sevier County to be charging condo rentals there at 40 percent. He said officials are waiting to see if that decision will be appealed on to the Tennessee Supreme Court.
He said it would give Assessor Marty Haynes “a little more comfort” to begin the higher assessments here if the Sevier County case is finalized in favor of the county.
Councilman Darrin Ledford said large corporations who have bought up multiple residential STVRs only pay at the 25 percent rate. “Wow, what an advantage they have,” he said.
Council Vice Chair Jenny Hill said for affordable housing the 40 percent rate “adds $100 a month in payments to every door.”