Short-term real property rental businesses; taxations applied. (SB471)

Introduced By

Sen. Emmett Hanger (R-Mount Solon)

Progress

Introduced
Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law

Description

Short-term real property rental businesses; taxation. Clarifies that the short-term rental of dwellings to transients for less than 30 consecutive days is subject to state and local retail sales and use taxes and local license and transient occupancy taxes. Short-term rentals are rentals for which advertising has been used or for which the dwelling has been rented on numerous occasions during the calendar year as set forth in the bill. Amends § 58.1-3700.1, § 58.1-3703, § 58.1-3706, § 58.1-3819, § 58.1-3840, § 58.1-602, of the Code of Virginia. Read the Bill »

Outcome

Bill Has Failed

History

DateAction
01/09/2008Prefiled and ordered printed; offered 01/09/08
01/09/2008Prefiled and ordered printed; offered 01/09/08 082835232
01/09/2008Referred to Committee on Finance
01/13/2008Impact statement from TAX (SB471)
01/16/2008Rereferred from Fin. (15-Y 0-N) (see vote tally)
01/16/2008Rereferred to Local Government
01/29/2008Committee amendments
01/29/2008Continued to 2009 in Local Government (15-Y 0-N) (see vote tally)

Comments

Ryan Nelson writes:

This is yet another proposed tax increase from a supposed conservative legislator. Worse yet, the bill has ulterior motices with potentially far-sweeping impacts. It attempts to prohibit short-term rentals through the back-door by defining them as a commercial use. Short-term rentals of single family homes, which is regualarly done throughout Virginia, particularly in resort areas such as Wintergreen, Bryce, Massanutten and elsewhere, are potentially at risk. Senator Hanger has allowed himself to be hijacked by a small minority of crazy citizens trying to ban such short-term rentals. They cannot do it straight up so they have now convinced Senator Hanger to attempt this shading deal. This bill is unconstitutional, would certainly be challenged in court, and is ill-advised.

Cindy Workman Whitelock writes:

Look out Sandbridge,Wintergreen, Lake Anna, Smith Mountain Lake, Massanutten RESORT,Byrce, Second home and vacation home owners are under attack again. Does Senator Hanger know that the Supreme Court ruled in the summer that rentals of vacation homes/second homes were a residential use? Look out, what is next? How about this being the back door to banning you from renting your home? What is the difference to renting it 29 days or 31 days? Rental home owners better wake up. As a rental home owner I am tierd of being taxed excessively and tierd of carrying the burden to pay all the bills. This bill needs to be killed. If localities want to impose transient tax they already have the right to do that. Folks who like to rent vacation homes in resort areas better take a look too. How about working on our real problems Senator Hanger?

Sherrill Glanzer writes:

Wow, does anyone realize how many of us middle-class Virginia citizens there are who have investment properties, and rent for ANY duration, that stand to be adversely affected by this bill?? Wake up, before it is too late to stop this from snowballing! Senator Hanger's bill didn't just "happen" - it's obviously the result of a small, vocal group with a personal and selfish agenda. Don't be fooled into thinking this bill would be good for the "whole" - it truly will not!

Barry Mark writes:

It never ceases to amaze me what a supposedly intelligent State Senator will do on behalf of a small band of crazy constituents. A couple years back, one tried to introduce legislation that would require the permission of EVERY neighbor before lights could be used on sports fields. This foolish legislation was submitted on behalf of a (supposedly) aggrieved constituent. Senator Hanger should take note that that effort resulted in a tidal wave of folks calling for the submitter's job. This foolish effort follows the same pattern. The Va. Supreme Court ruled on this issue. The smart folks in charge over in Town of Luray decided to drop this issue. Even the folks in charge in Rockingham County have wisely decided to drop this (after the Va. Supreme Court ruling). This effort will no doubt result in more lawsuits and for what? - so that Senator Hanger could pick up a few more votes? Note to the good Senator - there are a lot more of us than there are of them. Let's start contacting the folks in every resort area in Virginia (from Smith Mountain to Sandbridge) and have them demonstrate to the Senator's colleagues how foolish he has been.

Kay writes:

Since when is renting ones home out considered a business? Senator Hanger, do I need to optain a business permit before I host my next get togethere at my home? How about a business permit to sell my home without using a Real estate agent? Is it a business when I advertise my home for sale on the INTERNET? When you call renting a home for any period of time a commercial enterprise, this is a problem. Now I know why you were almost unseated by your own party. Wow! This bill will cost taxpayers more than it will bring in. We have some real issues facing us. This is a bad bad bill. I thought you ran on protection of private property rights. . . Isn't renting ones property including in the bundle of rights?

Wayne Lewandowski writes:

Senator,

I am shocked of this clearly bias piece of legislation! To think that the property rights of VA residents may be at risk because of your efforts is truly amazing! Do you have any idea of the financial impact this would have across the state? With subprime loans crashing all around us, do you think this makes sense to your constituents on the whole or for just a few? This is taken as an aggressive front to reclassify use of private homes (on a short term rental basis) as a business. We know the agenda of a small minority to get rid of us, why would you support this? Do you really believe this helps the residents of our state? Have you truly given this thought and consideration? For sure, you will hear from many more of us!

Kris writes:

I am stunned by this back door attempt to do away with short term rentals state wide!! This is not a tax bill!! This is an attempt to redfine the use of short term rental homes as commercial. The VA Supreme Court just handed down a decision that CLEARLY states the short term rental of second homes IS a residential use. Sen. Hanger's bill seeks to redefine the existing use of rental homes (as defined by the Supreme Court) so that local jurisdictions and property owner associations can take away our property rights. How many more foreclosures does this state need to see before they realize taking away property rights and leaving home owners out in the cold is a bad idea! It doesn't just hurt those who have vacation rental homes, it hurts everyone who ownes a home. This bill will be another major assault to an already floundering home sales market!!!

JK writes:

Dear Mr Hangar:

Do you know the difference between a resort community and for the lack of a better term a "traditional" community. The only problem that truly exists is people chose to live on the beach or in a ski resort and now are trying to have "Big" governement come in and tell vacationers they can't come.

So help me God, if you don't fix this thingrewsidentail vacation homes by affirming their residential status, I will change parties and vote for Hillary.

JL Schultz writes:

Well, it looks as though "Pay to Play" politics are alive and well in Senator Hanger's district. The local zealots haven't been able to do away with short term rentals through the county or the Supreme Court, so now the Senator is willing to risk a real estate market melt-down by playing second fiddle to a few constituents with an open wallet. Yes, we knew they were in your office in September BUT NEVER thought that you would use your influence in Richmond to introduce this type of irresponsible legislation. Senator, you are putting the entire Virginia real estate market at risk. VA citizens will find your bill appalling and should look to support your opposing candidate in the next election! Who is next running against Sen. Hanger - they have my vote already!

Lisa writes:

This will really hurt VA's economy -- could there be a worse time to mess with people's real estate holdings? I was looking at buying a vacation rental in VA, but not now! Is this what you wanted Senator?

Patsy writes:

With all due respect senator, if you can't solve the current real estate mess, please don't be become the 'problem' by making it worse -- this is the exact opposite of what the economy of the wonderful state of Virginia needs.
Counties and localities are already charging taxes on short term rentals -- so your law is not needed. How do you plan on replacing this revenue that each county and town will lose.
And how many tourists will visit neighboring states instead of VA when they only have time to visit for a weekend, or a week or two? How will current tourist areas survive just trying to attract folks that can rent places for a month or longer?
Kindly rescind your proposal as it's not in the best interest of the residents of any area of the state -- not even yours.

Sydney writes:

I am shocked to read through this "tax" clarification to find language that subverts the VA Supreme Cour's residential definition of short term rental homes; it is clear that this bill is all about defining these homes as commercial for "the purposes of any zoning ordinance or restrictive covenant." Is this language hidden so the the public doesn't find out the Senator's true objective until the bill is passed? Is this how the legislature is supposed to be run. This seems tricky and back handed to me. If the Senator is confident in his proposed legislation he shouldn't work so hard to hide it from his voters. Virginia be warned - now we have to wonder if our elected officials are eating away at our rights in bills like tax clarifications and political commendations!

Karl writes:

It's really not much of a burden to charge renters sales tax. The renter is paying the tax, not you. As for how much it would cost the property owner? Whatever the cost is for you to get a business license. For my business? That was a $10 one time charge to register my business name in my county. Not that much of a burden, if you ask me. Then, all you would do differently is file taxes with the rental income as income for your sole-owned proprietorship with a FEIN number you receive FREE from the IRS. All very simple.

I think all the ranting and raving is coming from people who aren't very educated in the matter. I don't see anything wrong with the state getting more revenue from RENTERS who, many times, are out-of-state individuals. I'd rather have visitors paying sales tax to cover state costs than myself. Wouldn't you?

If you are renting out your property and making income from that property, you are conducting a business. Period.

Peter Burke writes:

Karl, you have not read the fine print. It's not another way of taxing the public that is the real issue. This proposed Bill would require a short term rental to be rezone as a business. Do you think they will be allowed in neighborhoods with other single family homes?

I have owned a condo in CO and own a single family home in VA each for 10 years. I could not have purchased them if I was unable to rent them ocasionally for short term. They do not make a profit however they allow us to use them for weekends and vacation and hopefully when we chose to sell them they will produce a reasonable capital gain. We have never had a complaint from neighbors regarding our tenants.

Every summer we rent short term a the beach. I can't imagine not being able to do so in the future.

Senator Hager, I thought Republicans stood for low taxes and entrepeneurialship. Who are you pandering to?

Barbara writes:

This really is a bad bill. No other state has attempted to prohibit short-term rentals in this way, or even to prohibit them at all. This is a local issue that each jurisdiction in Virginia should be able to address in their own way. But to preemptively attempt to exclude rentals based solely on duration and advertising from residential communities is crazy. Does that mean that a long-term renter, or anyone attempting to rent on a month-to-month basis, also should not advertise his home for rent on craigslist.com? They would also be violating the "commercial use" restriction this bill attempts to impose. Senator Hanger, please withdraw this ill-advised bill. And tell JC Powell and his cohorts that you do not intend to carry their water for them. Let them fight their own local battles (which they have consistently lost).

Karl writes:

I'm no lawyer, but the section about zoning and restrictions seems to apply the county doing the zoning. They aren't saying that a house used as a rental property now must be zoned commercial. It is saying that the county or community would have the right to restrict this type of activity by changing the zoning or being allowed to restrict such activity within a community. It protects other home dwellers who buy a home to live in it full-time from having to put up with the problems, perhaps, associated with renting a property.

These homes were able to exist as rentals because they were zoned as residential homes...but if the county or community or other homeowners don't want that type of activity it would be impossible to get rid of this practice because the house was considered 'residential' although it was mainly being used for commercial purposes.

This would also affect any inn or bed-and-breakfast that may exist as a commercial enterprise while using a private home. What you really should be concerned about here is your own county and community. Do they look upon home rental properties as something important and useful for the local economy? That is where the trouble will lie as far as I can see.

If you have a 2nd home on the beach, only live in it a few weeks out of the year, and rent it the rest of the time, how is this a residential property? If other beach homeowners find their lives impacted by rude, obnoxious, or loud visitors, they would have no recourse. Perhaps rental properties have interfered with the property value of their homes. Who knows? But this bill would give communities and counties the right to restrict this type of activity, if they see fit.

Martin writes:

The real estate market is already in the tank. This bill will make matters MUCH worse for the entire State of Virginia. No responsible elected official should allow Senator Hanger's ill-advised attempt to kill the short-term rental market. Rather they should join hands to kill this bill now.

Jonathon writes:

Senator,
I am Active Duty Military. You have just proposed to take away the ability for my family and friends, along with every other Service Members family and friends, to visit and rejoice upon their military members return from deployment abroad. This bill further removes the potential for vacations in Virginia in facilities other than hotels, or the ability of homeowners to short term rent their property to people. This affects every resort statewide and the Hampton Roads area where I am stationed. The tourism industry, tax base for visitors, and rights of property owners are all changed by your proposal.

Sir, I understand the purpose for taxation and applaud your zeal in getting a bill to the floor, however I also find this method underhanded and shameful in how it has been approached. This bill, “SB471: Short-term real property rental businesses; taxations applied,” is a misnomer and poorly titled for what it intends to accomplish.

I would sacrifice all I have, including dying if need be, to give others the right to voice their opinions, retain those rights, and protect our way of life... However - when faced with the threat from within those I serve, what is a Service Member to do? As your constituent I STRONGLY urge you to move in another direction and continue to allow short term rental capability to flourish. The threat to the tax base, tourism industry, and of course, the effects on the health of the Military family itself – are all impacted by your proposal.

I will continue MY mission to protect our homes; will you continue your tasking to fairly and accurately represent your constituency? Will you PRESERVE and DEFEND those rights I have so that I can continue in my mission to protect our way of life?

Bob writes:

The tax is fine, it is the language of the tax. My property is residential not commercial. This is my second home. Tax me if you must,change my classification to Residential, or all this money you want to receive will be BANNED AWAY . I thought you ran on no taxation? Must have had you confused with someone else. Can't you find another place to tax? Abusive drivers were better than hitting real estate owners who are already taxed out their ying yang!

JL Schultz writes:

Karl,
No one is disputing that a business should be taxed. In fact, if you would like me (as an owner of a vacation home) to collect a tax on my infrequent rental base that's okay. The real problem here is that this bill has an underlying ulterior motive. Read carefully Karl ... the bill seeks to reclassify residential zoning which means that all those $800k dollar VA Beach condos (along with THOUSANDS of other Virginia properties in resort areas) will be in foreclosure by the end of 2008.

Can you spell T-A-X H-I-K-E? That's what will be needed to make up the difference in lost revenue from absentee tourism? Can you afford to lose significant equity in your home due to a property value pitfall? Think about it Karl ... this is NOT about fighting a tax!

Karl writes:

JL Schultz,

Read my 2nd reply...the state is not going to rezone your house a commercial property. Look at it again. It says:

"...any dwelling...that is subject to the tax under this section shall not be considered a residential use for the purposes of any zoning ordinance or restrictive covenant."

Like I said, I am not a lawyer, so maybe I am reading this completely wrong, but to me this is talking about a community being able to decide whether or not they want rental properties in residential areas. To me it is not saying that suddenly your million-dollar home on the water is now going to be considered the same as the gas station on the corner. Your mortgage won't change. It's still a house, not an industrial plant. And when you resell, it's a house you are selling, right?

I think this is really about preventing communities from turning into huge rental zones--like the area around Smith Mountain Lake. But what do I know? I'm just trying to read the words and interpret what I see there. I don't see anything in the language saying your house is now zoned commercial...period.

Karl writes:

Here's a good article I found about this very issue in other states like Florida and Hawaii:

A quote:

"Some of the biggest zoning battles are brewing in popular vacation spots such as parts of Hawaii, Arizona, Nevada and Florida. In some of these locations, short term rentals have been prohibited in residential areas for years. In other areas, however, short term rental restrictions are new. Recent law changes are typically driven by year-round residents who don't want vacationers rotating in and out of their neighborhood."

This is what I was trying to describe...this law would give communities the freedom to regulate how residential property is used in their community. Does that make any sense?

I'd be curious to hear more from property owners who would be glad to see short-term rentals banned or eliminated from their communities. Because this change would impact them as well.

If you want to read the whole article, here it is:

http://www.hotspottax.com/news.aspx

Joseph writes:

To Karl and others-
I own some properties that are considered short term rental, they are in reasonable neighborhoods. From what my attorney has pulled as state case law, once something like this passes and my short term rental properties are zoned as commercial, there is nothing stopping me from bulldozing the house and putting up anything from an apartment building to a 7-11 or bikini bar.

Personally I don't think a bikini bar would go well in residential neighborhoods, but the concept of suddenly sinking in a duplex or quad-plex and finding either construction workers or college students to rent sounds much more lucrative.

In some ways thank you... the loss I am taking paying for properties can now be re-invested and perhaps finally start showing in the black. Considering there are a severe shortage of 1/2 way houses and places that will act as safe-houses or shelters for runaways and battered spouses - maybe that avenue is the way to go.

Hope you sleep well knowing that because you supported some legislation to change the way other property owners take care of their own property exercising their rights, that you may have just destroyed your own neighborhood. Pray you don't live near my 'rental' houses... if this passes I'm making a gas station, runaway shelter, and beer pub at first opportunity!

Bill Prout writes:

Some people have nothing better to do than make things difficult for other people!

This bill will hurt more people than it will help...wake up.

N. Smith writes:

Passing this bill (sb471) would be extremely detrimental to an already ailing economy, & certainly to our area here in the Shenandoah Valley--which depends greatly on the income generated by the tourists who rent the privatlely owned houses & cabins. The folks doing the rentals have have licenses (income for the town & counties), collect & pay taxes on all rentals (to VA state & their local county), & the tourists generate income for all the shops, restaraunts, service industries, etc., etc.). I vote that this bill NOT be passed. Virginia Tourism industry would be greatly reduced!

Bill Davidson writes:

The practice of short term rental of residential homes has been a main stay of the economy for many localities across the state, particularly in the scenic and recreational areas so popular with visitors to the Commonwealth. This bill, if enacted, would by state law prohibit short term rental of homes currently zoned as residential in resort areas such as Smith Mountain Lake, Massanutten Resort, and perhaps many others. The net effect will NOT be more business tax revenue but the greater loss of the economic activity generated by visitors and guests upon which these localities depend. Can our economy on the brink of recession really afford this loss? Our leaders should be seeking ways to STIMULATE economic growth rather than reducing it. This bill simply should not move forward.

Susan Smith writes:

This bill would take money out of the wallets of tax-paying citizens who own homes, and send it to hotels, most of which are headquartered OUT OF STATE. Ski areas, and beach areas will be especially hit hard. Where is the incentive to buy property in the state of Virginia? Our economy does not need to send investors to other states! Kill the bill.

Carl S. Ey writes:

I cannot understand why any elected official would recommend any bill or legislation to harm our economy while it is in such a fragile state. Rental unit owners in the Shenandoah Valley are not getting rich off of their properties but the local towns out there and principalities are certainly reaping some economic benefit. This bill is simply going to compel rental unit owners to use the legal system to argue against the passage of this legislation. Hence, rental unit owners will lose more money. Rest assured, having a rental cabin, rental home or rental unit is typically a positive income generating vehicle but the income generation is not lucrative enough to support fighting a long court battle and legal fees associated with that fight. Stop this bill now, keep the citizens of America and Canada coming to the great Shenandoah Valley and enjoying the history and beauty of our country. KILL THE BILL and save us all some money!

Frank Drummond writes:

Another example of tax and control that would cause havoc all over the state. We need to stimulate the economy not destroy it. And I do not even own property like this but I do know what would happen if this bill is passed.
Kill the Bill.

S Vaughn writes:

We have been alerted to the SB471, sponsored by Sen. Emmett Hanger, that would greatly impact and may eliminate many short term rentals in the state of VA. It will also inundate the real estate market with properties that will have to be sold due to lack of revenue from rentals. How will this bill effect bed and breakfasts, camp grounds, and other types of temporary lodging for our tourists? Where do the ramifications stop?

Visitors choose short term rental properties to be close to natural and local attractions. If this option is eliminated, they WILL choose TN or NC for their getaway vacations and honeymoons. Therefore, those states and NOT Virginia will get the tourism dollars we so desperately need. Please do not let a few disgruntled homeowners impact the future of Virginia’s Tourism Industry.

This will also limit the competition for VA’s already overbooked state parks. If the state passes this law, it could be seen as a direct conflict. Many guests book these rentals to be close to VA state parks that are full.

Any unpleasant guests are few and their behaviors are already controlled by state and local laws and contracts. Legislation should not eliminate any choices of the majority of tourists that are responsible, respectful and appreciative of the areas where they visit.

Martin writes:

To Karl and others:

If, as you say, “…your million-dollar home on the water is now going to be considered the same as the gas station on the corner,” then why don’t I convert my million-dollar home to a gas station? Would that in some way make my full-time resident neighbors happy? Converting the home we built to hold our occasional family gatherings to a commercial use would certainly make me happy because I’m not making any big money renting my private residence for short-terms now. The short-term rental income helps pay the mortgage which I couldn’t afford otherwise. On the other hand, I would not be able to enjoy my grandchildren as I do now, which would be just my loss, right? Not yours. Not the State’s. And I would probably disappoint the many repeat renters we’ve had for the past four years that count on coming back to Virginia for their annual family gatherings. And I would probably upset the local full-time residents that use our home for their overflow family gatherings. But that’s their loss, not yours, right? And the loss of income provided by my renters to the local economy is no skin off your teeth, right?

On one thing you are completely accurate. This bill (SB471) introduced by Senator Hanger, has one purpose. It is to kill short-term rentals in Virginia, State wide. Senator Hanger is in the pocket of one of his local constituents who feels exactly as you do, that short-term rentals in some way are a detriment to a peaceful community. There are no compelling arguments to kill short term rentals. Traffic where short-term rentals occur is increased minimally compared to the tremendous increase caused by time-share units. Is anyone going after the time-share organizations? No. Crime statistics State-wide show that there are fewer felonies committed by short-term renters than any other category, including full-time residents. Why? Because short-term renters are primarily families, Boy Scout troops, knitting clubs, cycling groups, church groups, and the like, that police themselves and respect the neighborhood. Many nation-wide surveys have shown that limiting or killing short-term rentals has a devastating effect on the local real estate market. Who wants to invest in a community that won’t let the investor recover some of the investment? Why build a home that I know I can’t occupy full time if I can’t rent it for short terms when I’m not using it? The real estate Market is already bad (my earlier comment), and this will just make it worse, State-wide.

I would urge you to look beyond the “gut” instinct of thinking this bill is a panacea for local issues. Each local area of Virginia is unique, and those local interests are best served by the local County officials in sorting out the wheat from the chaff.

Aurora writes:

Senator Hanger, the bill you are proposing is not just a bad idea, it is a destructive bill. Short term rentals are not a million dollar a year industries for the individual owners. Why own them then? Entrepeneurial sense, a sense of achievement, an egg nest for rainy days, a means to help pay for the property while not in use, instead of leaving it vacant which may attract vandalism, the reasons vary with each owner.
The fact remains that for some, such as elder couples it means a sense of purpose, and a way to supplement the retirement income (retirement now days with the cost of living does not necessarily mean financial solvency), being able to own that second home with the short term rental helping to pay for it, and for others an investment. whatever the reason each individual has for having short term rentals, the fact remains that rare is the individual who has it/them, and doesn't meet the requirements of their local Counties. Even more rare are the individuals who rent these properties who do not respect, not only the property, but the surrouding neighbors. After all, these renters who are families or future families want their families to feel safe where they rent as they want them to feel at home. The few that have a problem with short term rentals are those who have nothing better to do than the desire to get their names in the paper regardless of whom they hurt. This industry helps communities in many positive ways. It provides visitors a place to stay that in many cases is much more affordable, the comforts of home, more independence and more privacy, than hotels. They may not generate the income of hotels, but they nurture the local economy and provide quite a bit of employment for local residents and merchants. It is a very quiet, but powerful industry. After many years of traveling in-country and abroad, I have had the opportunity of first hand witnessing the impact such industry has in the localities where such properties are located. I am a B&B owner, but I also travel and when I do, I choose to stay in B&B's or other types of short term rentals. The industry is very personable and very unique. Owners not only enjoy sharing their homes with travellers, they are proud of their properties, and unlike apartment complexes, and/or many large hotel chains they take pride in their condition and maintenence.
Their occupancy rate aids the larger lodging facilities since they take the overflow and most of their renters are families or couples who every year return to where they are not only getting their money's worth, they feel welcome. THEY ARE GOOD FOR THE TOURIST INDUSTRY, THEY ARE GOOD FOR THE LOCAL ECONOMY, THEY ARE LAW ABIDING MEMBERS OF THE COMMUNITY, why would anyone want to interfere with what is good for everyone all around. Senator, you are in office to take care of the "big problems", let the local governments take care of their community issues as they see is best for their local communities Oun County has been wise they have reviewed such an issue and opted to leave it alone since it hurts no one. There may be some local issues that may require you backing, but this is not one of them. For those who are medling in matters they don't undestand, simply because there is nothing in it for them, please stay out of it. Stop wasting our tax payer's money and our representatives time. Allow the Senator to do what he was elected to do. Before you ask an elected officiala to pass a bill that affects so many, those few who have aspirations to politics should do more research. Maybe own a property themselves, rent it out, live the experience, contribute something to the community other than interference, and if the outcome is so negative that it justifies your position. Step back and evaluate what you have done wrong to have such destructive renters, because in twenty + years, I have only had one bad experience and it affected not my neighbors, not my community, not my town, but me alone. Pretty good ha!. Kill the bill.

Daneen writes:

Please do not pass this bill! Are you trying to completely shut down the tourism industry in VA? We own a successful vacation home business in the Shenandoah Valley / Blue Ridge Mountain area. If this bill passes we will see personal financial ruin. Additionally, where would all the guests we accommodate go? There is very obviously a market for vacation rentals in VA. PLEASE do not pass this bill!

Jim writes:

Here we go again. Haven't these people learned enough from the disasterous "Taxes disguised as Driver fees bill?" After a public outrage that was finally repealed.

There must be something self-serving about this bill to Senator Hanger just as it was to Albo in the case of the Driver Fee bill.

Will politicians never learn that they are there at the public's sufferage?

I wanted the throw the whole bunch out in the last election.

David Boynton writes:

I think this is an outrageous bill. Aren't we supposed to be promoting the travel and recreation industry?

Aurora writes:

NO!, DEFINITELY NO!

Karl Baldwin writes:

I created a website (www.mountain-lodging.com) 10 years ago to list vacation rentals for owners of weekend rental property. I currently have 194 Virginia listings, mostly in Page County. Many of my clients have been so successful they have purchased many more properties to increase their inventory. Three different clients I know of in Luray have built a total of over 20 new structures in the last 5 or 6 years for their vacation rental businesses. These citizens have business licenses and collect and pay state, local and federal taxes which include an additional 9% lodging tax. Over the years several clients have volunteered their annual revenues to me which appears to be an average of $22,000. When you do the math it looks like this; $22,000 X 194 = $4,268,000 per year. That creates a lot of tax infusion and that is only from my clients. I don’t know how many more thousands of other weekend rentals there are in Virginia but this is not small potatoes. This also is not a casual business it is a growth industry creating jobs and generating all kinds of peripheral business profits for the state which keep filling up the tax coffers.

SB 471 intent is to reclassify these owner’s properties as commercial. If this happens then most owners will be subject to zoning laws and community bylaws which disallow commercial business operations in a residential community. To summarize Senator Hanger, bill SB471 will force tens of thousands of businesses into bankruptcy, force the country's largest number of bank foreclosures for a single state in history, damage the state's economy beyond any foreseeable recovery and put you into the history books as one of the state’s most reviled politicians. Pull the plug on SB 471 before you embarrass yourself any further

Best Regards,
Karl L. Baldwin
MountainLodging™
Vacation Cabin Rental Listing Service
http://www.mountain-lodging.com

Scott Seaton writes:

Dear Senator,

This bill clearly involves increasing taxes and decreasing owners' property rights of homeowners.

Please kill the bill ASAP.

With kind regards,

Scott Seaton

Karl Baldwin writes:

In response to Scott Seaton's comment, I'd like to point out that there are no increases in taxation. The legitimate vacation rental owners are already licensed in their counties and do collect and pay state, local and federal taxes which includes an additional 9% lodging tax. The bogus suggestion of an increase in taxes as the purpose of this bill is only a smokescreen to cover up the actual purpose of bill SB 471 to re-categorizing residential use into commercial use which will close down any vacation rental property.

Karl L. Baldwin
MountainLodging™
Vacation Cabin Rental Listing Service
http://www.mountain-lodging.com

Koo writes:

Dear Senator Hanger:

I received the following message from a colleague of mine, therefore I am prompted to write you. I personally have no familiarization of you as a leader in the Commonwealth legislative branch or your achievements in any legislative works in the Shenandoah valley where you serve your constituents, hence, I can not comment on you as an individual. However, since your proposed bill has all the notion of putting more regulations and taxations on the table that are focus on a very very small (narrow) portion of the state business activities, your bill if passed, will definitely discriminate a minute numbers of property owners who may not be able or having the resources to challenge you. Your proposed bill spells extreme burden and permanent damage to vacation rental property owner's economic, not only just that, your proposed bill is done and overlapped on top of an existing taxation and regulation that has already governed for decades in this sub-group industry ( vacation rental) within the lodging business.

As a home (condo) owner myself in the State of Virginia, my property falls into the vacation short term rental category, accordingly, it also falls in the lodging business subject to 13% combined local and state sale taxes, as well as local licensing requirement, and subject to property and personal taxes like all property owners throughout Virginia. All of these mentioned taxes and fees are paid regularly to Virginia State and her local jurisdiction on top of the retail taxes mentioned based on Gross rental fee.

How much more money do you want in order to make you or your constituent hold, happy, satisfy, or have the wellbeing (feeling) of justices is served.

Although, I do not know you other than what I gathered from your public profile, in any event, please do not barking up the wrong tree, and please do not go overboard on an one-sided ill advised or an emotional charged bill. You need not bringing your batting average in your legislative playing field to below .500 because of some misinformation you had gotten. Do not make this bill to become a laughing stock amongst conservative group that you belonged to, and or giving the appearance of a fool in the making amongst liberal colleagues in your assembly.

I trust that you will do the right thing by abandon your quest in this bill immediately on or before January 29, 2008.

Best Regards, and many success to you and yours,

Koo

Name: Jo
Email: savevarentals@cox.net
Phone:
Comments: STOP the proposed STATEWIDE ban on Vacation Rental Homes! A bill was introduced, SB 471, which seeks to ban short term rentals (vacation rentals) in the state of VA. The senator has cleverly hidden his attack on short term rentals by burying it in a 9 pg tax bill titled 'Short-term real property rental businesses; taxations applied.' We need to start working NOW to put a stop to this bill and protect our property rights! The bill is being heard this Tues 1/29 Please contact our group ASAP

Michael writes:

this bill has not been well thought out and won't generate the tax money they believe it will and if you feel so moved tell them that changing the rules when it comes to property rights sets a very bad precedent.

Jean Mockler writes:

Sen Hanger,
sb471 this is a bad bill for every one. It is not a tax bill but an attempt to redefine the use of short term rental properties as commercial. This is not a good bill.
Jean

Patty Roberts writes:

Senator Hanger and colleagues in the Virginia Legislature:

This bill will devastate people just like me, who own and rent an investment property in a vacation destination. Tourism and tax dollars will be lost when these homes cannot be rented. My guests from Pennsylvania, Maryland, DC and Virginia will spend their money in other states. Don't pass this bill, please!

Patty

Patricia B. Elam writes:

We are definite against bill SB471.Our family have worked hard to maintain our rentals. We
pay a great deal of tax in Virginia. This is definite wrong to tell us what we can and cannot
do with our property.

Paul Zdunek writes:

Sen Hanger
Be careful what you wish for. What is the purpose of your bill and who does it benefit? Redefining the short term rental structure which has been in effect for decades would have severe economic consequences for VA Beach and cost the state millions in lost revenues and unemployment compensation. VA Beach depends on tourism dollars. Your bill would not only affect the livelihood of the tourist dependent industries but would have a substantial impact on the service industry. Your bill does not take into consideration people’s lives, lost revenue to the state, the substantial impact on the economy of VA Beach and the entire Hampton Roads area, and more importantly vacationers would go to our neighbors in North Carolina and spend their money. Duck and surrounding beach areas have not redefined short term beach rental structure, so why should you? Your bill makes absolutely no common sense, unless you want to set up developers to buy out Sandbridge beaches, the only natural resort left in VA Beach, and build commercial hotel structures. Your bill is another politician not minding his own business but instead forcing his power upon people who for decades are going about their own business.

David Keith and Brenda Keith writes:

Dear Senator Hanger,

My wife and I strongly oppose SB 471.

Your proposed action is not only high-handed, it is seriously misguided.

1) By this action, you propose to in one fell swoop devastate property values for owners of vacation homes. Hence, your proposed Bill amounts to confiscation of property from thousands of Virginia's citizens.

2) In addition to personal loss, local governments will lose their tax base.

3) By taking such action at the state level, you are proposing to raise zoning actions, normally the purview of local governments, to the State level. A fundamental tenet of the government of our country, dating back to Jefferson and the other Founding Fathers, is to take action at the lowest level of government possible, not the highest.

Actions such as what you propose are the sort of manoeuvres that remind us of the Soviet Union and Nazi Germany.

Please rescind SB 471.

Waldo Jaquith writes:

Actions such as what you propose are the sort of manoeuvres that remind us of the Soviet Union and Nazi Germany.

And Godwin's law is proven again.

James Maclin writes:

Senator Hanger's bill looks like a simple "Tax Clarification" but it is not. It will take away my right rent a house for my family at the beach or in the mountains. Why would you do this? $$$$$ has to be the only answer. Who is giveing $ to you Senator Hanger? Why do we have you or people like you in the Senate? Maybe we can correct that in Noverber.

Kim Thompson writes:

My husband and I strongly oppose SB 471 and urge you to take whatever action you can to prevent its passage. This bill, if enacted, would in essence prevent short-term rental of residential homes -- even those in resort communities where such rentals have been the principal source of housing for resort visitors for many years.

As you know, the economy of many resort communities across the Commonwealth relies substantially on the short-term rental of residential homes by vacationing visitors. These visitors not only rent the homes – they eat in restaurants, visit parks and tourist attractions, and buy groceries, gasoline, clothing, and souvenirs.

Many such communities are treasured by visitors and residents precisely because they are not overrun with large hotels. Eliminate the rental vacation homes and you eliminate the tourism destination itself – OR you transform its basic character, as hotels and other commercial establishments move in to fill the vacation housing vacuum. Tourists will bypass Sandbridge Beach and spend their dollars in North Carolina beaches; others will pass Smith Mountain Lake or Massanutten and go to West Virginia, Maryland, or Pennsylvania. As that happens, the economies of these Virginia destinations will be terribly damaged. Stores and restaurants will close, housing values will plummet.

Many, many Virginia families who cannot afford to own a vacation home without the added financial support of supplemental rental income will be forced to put their vacation homes on the market, thus adding substantial downward pressure to Virginia property values already suffering in a terrible real estate market. And families looking to buy vacation properties will certainly bypass Virginia resorts – like the vacationers, they will take their dollars and enthusiasm to more welcoming economies in other states.

We are looking to our representatives to support – not devastate -- the economy and the housing market in our Virginia resorts. Please, please work AGAINST SB 471 and the extraordinary damage it would cause to already-fragile economies in many resort areas across the Commonwealth.

Tom H. writes:

As I understand it, this bill would reclassify my second home (a beach property) as a commercial property and thus make it impossible for me to rent it out on a short-term basis (e.g., weekly beach rentals). There are literally thousands of Virginians like me. So this bill would:
1. Severely damage tourism in Virginia
2. Make a tough housing market worse
3. Cause a dramatic drop in property values in rentals areas like my second home.
4. Ruin the vacation options of many families in Virginia and those who travel to Virginia for short term trips to the beach, skiiing, etc.
5. Most importantly, take away my rights to earn a return on my investment in my second home.

Barry Bless writes:

My wife and I are in shock.
If this bill passes we will loose our beloved second home!
If our home is put on the market, unable for the next buyer to rent short term, it will be severely devalued.
Multiply this by many thousands and this would be a "taking" of monumental proportions by the State.
Potentially thousands of devalued homes would glut the market.
If this bill were to pass at any time, but especially in this real estate market, it will have far reaching consequences.

misty writes:

Our family STRONGLY oppose this bill. My husband worked a factory for years, then his job was phased out. That job was all he had ever known. So we invested our time and money in rental properties, and this is our job NOW. If this bill is passed then it will greatly impact the future of Virginia tourism. When we go on vacation, we go as a family of at least 6 people. It is very expensive to buy 2 hotel rooms, opposed to renting a home in which my children aren't loud and "bothering" other guests. If this bill passes our family will no longer be able to vacation in our own state.

B Jackson writes:

What kind of jacked up bill is this?! Thousands of homes, tens of thousands of service industry business owners and employees, hundreds of millions of dollars in tax base including sales tax and fuel tax, still more in tourism money, all in jeopardy because of a couple wealthy constituents who don't want common working class folks to have the right to rent and vacation near their mansions? If this bill passes, those very constituents will soon see their mansions surrounded by blight, with boarded-up neighboring homes representing the broken dreams of tens of thousands of honest, hard working rental property owners, some of whom have survived several hurricanes, 9-11, a difficult economy, and more. Their own property values will drop rapidly, violent crime and theft will sharply rise, and governments will be faced with broken communities that are more expensive to govern and police and that raise very little tax dollars. Please, let this bill die a quick and efficient death!

Waldo Jaquith writes:

In the Daily Progress, Bob Gibson explains how this bill met its fate.

Maureen Chambers writes:

I agree with Kay who said "We have some real issues facing us. This is a bad bad bill. I thought you ran on protection of private property rights. . . Isn't renting ones property including in the bundle of rights?"

Karl Baldwin writes:

Considering that Senator Hanger submitted bill SB 471 with suspicious timing that coincided with the Rockingham county litigation between owners that want to rent their property short term and owners that don’t want them to; and considering the fact that Senator Hanger even voluntarily acknowledged during the January 29th General Assembly meeting, the fact that he was approached to introduce such legislation by one of the litigants (read the transcript of that session if you don’t remember), has to raise eyebrows. Then considering that there was no useful purpose for SB 471 other than to reclassify “residential use” to “commercial use” for short term rentals, which would have directly influenced the ongoing litigation concerning this matter, one can only conclude that he has been caught with his hand in the cookie jar. And even though his bill’s purpose was discovered and prevented, it would be irresponsible if there was no investigation into the senators attempted abuse of power and corruption.

Best Regards,
Karl L. Baldwin
MountainLodging™
Vacation Cabin Rental Listing Service
http://www.mountain-lodging.com

Linilla writes:

I've lived next door to a house that was converted to a vacation rental. The owners rarely visited and the maintenance of the house suffered. But more annoying, some of the renters were noisy and strew trash around the neighborhood. At one point, a drunken guest pounded on neighbors doors in the middle of the night, frightening some of the residents.

Yes, a community should have the power to restrict vacation rentals. Most communities would seek to regulate them rather than eliminate them, unless the renters presented a hazard to peace and safety.

J.B. Lorette writes:

Sen. Hanger,

This is an excellent bill with a very limited impact despite the "semi-hysterical" responses on this posting. They are taking to ridiculous lengths the effect this bill will have. You simply ask that those who use houses for vacation rental should pay the same transient occupancy tax that any B&B, boarding house and the like, already pay. If a house is rented multiple times per month, why should they be exempt from paying the tax that fits the use they are making of the building?

Apparently, this small group (fewer than 50 owners of rental homes in an area of over 900 houses) has organized a write-in campaign--above-- to make it appear that "everyone" agrees with them. This is absolutely NOT the case. We have a huge number of people who agree with you, Sen. Hanger, and we will be galvanizing them to write in and let you know that this is the case.

Keep up the good work, Senator, and we appreciate your efforts to permit the taxpayers of Virginia to collect every dime in taxes to which they are already entitled by common sense.

Bob Bloomquist writes:

To the Richmond Sunlight Web Site
I'm a full time resident in Massanutten Village since 1993. When I purchased our home I was told that when Massanutten Village was developed it received a R-4 zoning classification that provided for multiple uses of the various sections of the development. I was told I lived in a "singe family residential" area zoned R-4A. I was further required to sign the covenants that all "home owners " agreed to adhere to in the use of their property. It clearly stated the home was for "residential" use and was not to be used for running a business. The other 3 areas within R-4 zoning (R-4B, R-4C and R-4D) do permit multi-family and commercial activities. So there are already areas planned for just this type of rental in our community--but not in R-4A, which is the area designated for single family use only.
For over thirty years the "residents" of Massanutten have lived along side with the developers and vacationers of the Great Eastern Resort. The few short term rentals that took place in the R-4A section on the mountain were on a relatively small scale. This was mostly handled by owners, with friends or relatives and their frequency was mostly associated with major holidays or events like graduation at James Madison University. This practice may have been an infraction of our zoning laws even then, but to the full time residents it was minor at best.
In a recent study of Vacation web sites it showed that in 2003 there was one property in Massanutten that was advertised on the Internet to rent for week ends or less than thirty days. The reality now is that in 2008 there are 62 homes now offered on the world wide vacation web sites in R4-A section.
Going back to my original premise of buying a home in a "residential" zoned neighborhood. I feel the covenants and the zoning laws are now being abused by the current "short -term" land owners. There are dozens of stories about misbehavior on the part of "short term" occupants with no regards for their neighbors. It's all about money. Otherwise why would they invest in three, four or more properties. I am not a lawyer but it seems that if the current zoning laws under R-4A prohibited short term business to be permitted in "residential" neighborhoods, the current and ever increasing violators of our laws should be asked to take their businesses to a properly zoned area.
With approximately 80% full time residents , and 15 % long term rentals we feel that a small minority of home owners are changing a wonderful residential community into one with an uncertain future; I believe Emmett Hanger's bill is trying to clarify a loop hole that is being abused by business people that have no concern for the residential zoning provided under the zoning laws at Massanutten Village. When the matter is finally settled in court I hope the common sense I thought was spelled out for a "residential" zoned area will prevail. Thank you for taking time to read my opinion and that of the majority of R-4A owners..

James C. Powell writes:

I support Senator Hanger's SB471. This legislation defines the daily rental of homes in residential neighborhoods as a business that is subject to the same taxes paid by motels and hotels such as Motel 6, Hampton Inn, Microtel Inns and other motels.

This business model is a high growth Virginia industry. Today there are 103 Virginia communities in which investors are buying homes intended for single families and renting these homes to up to 20 individuals for $300 per day ($15/day for each individual). Comparable facilities at a motel would cost $50 to $60 per day or more per individual. In addition, today the customers do not pay transcient ocupancy tax, which is another competitive advantage. Reservations for these homes are made on the internet. All that is needed is a credit card.

In my community, Massanutten, VA, I live in an area zoned R-4(a)(zoned for single family residences and no businesses). In 2003 there were 2 daily rental homes advertised on the internet. Today there are 62 and the number is increasing daily. These rental homes are transferring demand from local motels into homes intended for single families.

An estimated 56 of the 62 of the Massanutten rental homes are owned by investors who live outside of our community. A number of these investors owned up to four homes. One of the local residents who owns a daily rental home lives next door to the rental house. These properties do not qualify as second homes. These are investor owned motel operations that should be defined as businesses and their customers should pay transcient occupancy taxes.

These investors ( many of whom are not Virginia residents) want to operate businesses in residential neighborhoods, compete with motels and avoid paying taxes. Senator Hanger's legislation will correct this injustice and define these business models as a business.

A number of organizations are forming in Mssanutten as a result of this Public Safety issue. These organizations support legislation such as Senator Hanger's bill and other similar legislation. Elected officals at the local and Commonwealth levels are expressing interests in this issue.

There approximately 1100 single residences in Massanutten that are occupied by families. The children range in age from infants to college students. I wonder where those who support the daily rental of homes will be the day after we find the occurrence of the 2006 Florida incident ionvolving a sexual predator and a nine year old who was buried alive by the predator.

We appreciate those who support our effort. An organization of which I am a member, Preserve, currently has approximately 100 members and is increasing in numbers daily.

While the public debate is underway Virginia should be collecting taxes from the customers of these daily rental properties.

J. C. Powell

Barry Mark writes:

This bill was bad law and the members of the committee were obviously swayed by the comments of short-term rentals across Virginia - and not the small group in Massanutten fighting them.

Julie Wagman writes:

SHAME ON YOU MR. POWELL!!! How dare you exploit the death of a young girl by a nearby RESIDENT for your own inflammatory purposes!!!!

From Wikipedia: "Jessica Marie Lunsford (October 6, 1995 – February 23, 2005, confirmed February 27, 2005) was a nine-year-old girl who was abducted from her home in Homosassa, Florida in the early morning of February 24, 2005. Believed held captive over the weekend, she was raped and later murdered by 47-year-old John Couey who was living nearby."

Mr. Couey LIVED in a nearby trailer. He was most certainly NOT a short term renter. How dare you treat such a horrific event as propaganda for your fight to illegally ban short term rentals! If that is truly the best evidence that you have, surely everyone can see how weak your arguments are. You have mocked one of the most tragic events to ever face this country. SHAME ON YOU!

Those comments should be removed from this website!