Public session addresses campground owners' concerns
July 29, 2009
Local campground owners looking for clarification and instruction on the Meals and Rentals Tax increase passed just a few weeks ago by the NH legislature piled into Patrick's Pub in Gilford last week for a public forum put on by the Lakes Region Association.
Under this law, "campsites" are now in the same category as hotels, making campgrounds subject to taxes. The site itself is now taxed, whether the grounds are for RVs or tents and sleeping bags.
House Bill II, passed at the 2009 Legislative Session, will increase the Meals and Rooms (Rentals) Tax from 8 percent to 9 percent. The tax change has been in effect since July 1, yet Robin Paveglio, a taxpayer advocate from the Department of Revenue Administration for 12 years, reassured business owners that the tax change would not be enforced until each one of their question is clarified.
Paveglio said she could answer questions on the recent changes and address concerns, although she admitted she did not have all the answers, considering the proposal was passed last minute. She said she realized it must be overwhelming for the people who own campgrounds or RVs to be hit with a sudden tax change that will require them to obtain a license and collect tax for the state, she said.
"The legislative administration passed changes quickly. We (the DRA) don't make the laws, but we do enforce them. It wasn't expected. We usually have more notice. There's a lot of frustration and aggravation," said Paveglio.
Campground owners asked for clarification on seasonal camps versus long and short-term camps, and whether an open or closed camp mattered. Some owners found the new terms confusing, because many of them open officially for six months but allow costumers to access the grounds year-round.
Although short-term campgrounds are subject to taxes, said Paveglio, short-term being six months; long-term camps, which go for 185 days, are not taxable.
"You are all throwing out words like seasonal," Paveglio said. "It doesn't matter whether the grounds are opened or closed, it has to do with rental over 185 days. If the contract itself is truly long-term, then it is exempt from all taxes. If it's less than 185 days, you may want to re-do your contract."
Some campers didn't like the sounds of this, considering their contracts need to be issued in two to three weeks.
For owners whose campers already paid taxes year round, Paveglio explained that some would have to write up new agreements. Owners may also have to send a written letter from their costumers to be reviewed by the DRA if they wished to be exempt from taxes. Either way, said Paveglio, for now on all owners will need to track consistent records for rentals.
Owners will need to report their taxes online each month, although DRA is still making modifications to the forms, said Paveglio.
"If you have questions on how to deduct or calculate taxes, we have expert auditors," she said. "I apologize that I can't be more clear. This is frustrating for me, and for my staff. Nothing is clear until administrative rules come out."
Paveglio said that a legislative public hearing will soon be issued, where business owners can voices concerns to lawmakers. They may also push for an extension on the new tax change because of the short notice for owners who have not been given enough time to submit for new licenses. Paveglio predicted that the new rules to the tax change will be announced within the next month or so.
Utilities were also brought up as a concern. Paveglio explained it would depend on whether water or electricity is all-inclusive – in other words, whether it is part of the site or not, such as a dock. If the utilities are a separate charge, or are not directly associated with the site, then the utilities are not taxable, said Paveglio.