“Host Compliance has been so useful to us. We’re very impressed with how much we’ve been able to collect in back taxes and we’re really looking forward to seeing what we’re able to achieve moving forward.”
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- Yates County, NY
How Yates County, NY collected $185K in back taxes in six months and put that revenue back into its community
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Overview
Yates County is a quaint, lakefront area comprised of nine towns and four villages in New York state. After an influx in short-term rental (STR) activity, spurred by the pandemic, Yates County’s finance committee realized how much the entire community could benefit from maximizing their collection of occupancy taxes. The county moved from a manual process and instituted Granicus’ short-term rental management software to help them easily identify hundreds of hidden STRs and collect $185,000 in back taxes in just six months. The county allocated the revenue collected to fund the Tourism Advisory Committee (TAC) and Natural Resource Grant which helps fund and create local events and activities, beautification projects, and natural resource improvements.
Metrics
- $185,000 Collected in back taxes in six months
- From 200 to 753 Short-term rentals identified
- 67% Short-term rental compliance rate
- $200,000 Projected to be collected by year’s end
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Situation
Hiding in plain sight
The Yates County finance department, which manages short-term rentals, is a small team of only four people. On an annual basis, one of those team members would manually check the popular short-term rental marketing platforms for local operators, track their findings in an Excel spreadsheet, then contact the hosts one-by-one. “She would even go on Facebook to see who was posting about short-term rentals,” said Jessica Mullins, director of finance at the county. “By tracking all rentals we are now able to keep the playing field level for those that were already in compliance” Mullins added. It was a very haphazard, inefficient process that was only a fraction of the team’s overall responsibilities.
During COVID, there was a huge spike in short-term rental activity, but the occupancy taxes collected didn’t mirror the influx. The finance committee knew they needed a better way to identify short-term rental hosts and monitor their activity, so they began to look for software to help them simplify the process and found Granicus. The county’s ultimate goal was to collect tax revenue that could be funneled back into the community. After implementing the software, the finance committee was shocked by what Host Compliance uncovered.
“It's been quite a whirlwind to see how many people are actually out there renting in Yates County. There are so many more operators than what we thought.”
— Jessica Mullins, Director of Finance
Solution
Dazzling digital discoveries
The finance committee was able to level the playing field by managing the county’s short-term rental population within the user-friendly Host Compliance dashboard. Before Granicus, the county manually managed 200 short-term rental units in Excel. With Host Compliance, the finance team discovered 753 short-term rentals being operated!
“Host Compliance is really simple to use, and it was easy for us to get up and running.”
— Jessica Mullins, Director of Finance
Host Compliance has helped arm the county with a better understanding of local STR activity. The county now knows that its tourism is more consistent than previous estimations. That intel provided insight to gear events during the fall and winter months, in addition to the summer. The county also learned that units were popping up in unlikely places. While many were located on the lake, as expected, many units were discovered in other popular areas as well, which helped the county hone-in on locations for improvements and events.
Results
Everybody wins
Midway through the year, Yates County has already collected a whopping $185,000 in back taxes, which equates to an impressive 67% compliance rate. The county projects its back tax revenue to climb to more than $200,000 by the end of the year.
“The more transparency we can provide about how [short-term rental] funds are used, the less divisive short-term rentals become.”
— Jessica Mullins, Director of Finance
While short-term rentals are still a polarizing topic in most communities, their popularity continues to soar. Because of that fact, Yates County astutely decided to capitalize on its growing marketability and use the investment to pour back into the community. Half of the revenue goes to the county’s Tourism Advisory Committee (TAC), a group of local businesses that allocates funds for local events (like trunk or treating events for Halloween) or beautification projects around the county.
TAC’s goal is to encourage overnight stays, otherwise known as “heads in beds,” which benefits the local tourism economy. Another portion of the revenue is applied to a natural resources grant that focuses on improvements to trails, parks, playgrounds, and other outdoor activities. “Yates County is a very small county, so any funds we can bring in really help bring life to our community, which benefits everybody. And the more transparency we can provide about how those funds are used, the less divisive short-term rentals become,” Mullins added.
Given the immense revenue potential of the short-term rental market, the county intends to continue to invest in itself by adding Host Compliance modules that can help manage mailouts and streamline the process even further.