Host, Christine Karpinski: Today's guest is Jettie Clabo. She is the trustee for the Sevier County Tennessee offices. Now, in that position, the trustee is basically the banker for the county. She receives the taxes that the homeowners send to the state, and she disperses them to the various places within the county, and also she is responsible for distributing monies to fund various things within the county.

What we are going to talk, today, about, is Sevier County, Tennessee has implemented a new occupancy tax, a 3% increase in occupancy tax that went into effect on July 1st. So we are going to specifically talk with Miss Clabo about this, and about how it affects all of the property owners who collect and pay sales tax in Sevier County, Tennessee.

Thank you so much for joining us, Miss Clabo.

Guest, Jettie Clabo:  Well thank you, it's nice to be on your program.

Christine:  I don't know if you know this or not, but I actually own cabins in Sevier County as well, and I heard about this 3% occupancy tax increase sort of by chance. I was reading one of the message boards and somebody had written in and said, "Hey, did you hear about this?" And I was very surprised, since I am an owner in the market, that I hadn't even heard about it.

So when does that 3% occupancy tax go into effect?

Jettie:  OK, it became effective July one of 2007.

Christine:  OK.

Jettie:  And the reason that several private owners did not hear about the tax yet is, first of all, my office actually heard about the deal about a month prior, and we tried to locate rental agencies that were handling the properties for individuals, the property owners. So our first thing was to get those people notified, because some rental agencies may be collecting for 200 people. So our first goal was to get all the rental agencies. We got those names from the state and from individual business licenses and things like that, that do rental agencies. So we tried to notify all those companies to start with.

Then we have asked those companies, through my literature that I sent them, to please send me a list of‑‑a one‑time listing‑‑of who they rent for, so we can take them off our mailing list if we try to contact individuals. Because if your rental agency is collecting it for you, it's just like basically part of the sales tax division, then you would never receive a report, it would just be handled through your rentals.

Christine:  Right, right. Now, as far as the areas that it affects, I mean, this is all of Sevier County; and just to be clear, Pigeon Forge and Gatlinburg, the actual cities, within the city limits, have different taxes. This also affects them, is that correct?

Jettie:  No, it does not.

Christine:  Oh, OK.

Jettie:  OK, it's only, the 3% lodging tax that we are talking about only affects rentals, actual buildings that are located outside of any of our cities.

Christine:  OK.

Jettie:  So if your cabin is located outside one of our corporate city limits, then you would pay the 3% occupancy tax. Now, if it is already located in the city, the cities are already collecting a hotel/motel tax. Some cities have a different rate. We have four cities in our county. We have Sevierville, Pigeon Forge, Gatlinburg, and Townsend. Those cities are already collecting what they call a hotel/motel tax, which is basically what our lodging tax is.

Christine:  Right and that rate is similar.

Jettie:  I know one of the cities is 3%, and Pigeon Forge I don't think is higher than 3. Gatlinburg is 3. Anyways, they have been collecting that for a long time, but with all our cabin rentals, and as our county has grown, then they decided that one way we could collect revenue to help fund some of our projects was to collect a lodging tax outside of the corporate limits of the cities.

Christine:  Now that actually kind of makes sense, because I actually own outside the city limits, so I am a little biased, because this is now affecting me; but I think it sort of makes it a little bit more fair, because the people that owned within the Gatlinburg city limits did have to charge more sales tax, and I would imagine that they may have lost out on a rental or two due to that, where somebody says, "Well I could stay just a little bit outside of Gatlinburg and not have to pay that extra 3%.

Jettie:  Right.

Christine:  Now, OK, so it went into effect on July 1st.

Jettie:  Correct.

Christine:  I wasn't notified, whether it be my own ignorance, not reading the paper, or just not being notified. What do I do as far as, OK, I've got, here we are, today is July 13th, and I have already had renters come and go. What do I do? Does that have to then come out of my pocket?

Jettie:  No. I mean, we realize it's going to take two or three months to activate the program completely, because you just don't notify this many people, or double‑notify them through the rental agencies or individuals, and as they receive notification they can just say, "This is the first time. I didn't read your local paper. This is the first I heard of this bill and I started collecting on this day." So we're not going to basically backtrack and make those people, if they are renting their own cabin or haven't had any kind of notification of this. But most rental agencies, I think, have had notification.

Christine:  Right, but we're talking specifically...

Jettie:  Individuals.

Christine:  In this group we've got a couple of thousand, probably 3,000 owners, who rent their property by owners, so I guess that's really what concerns me.

Now, me personally‑‑and I'm sure this is probably true of a lot of our listeners, is‑‑I've already got my Octobers pretty much booked, my December I'm pretty much booked, I'm already booked all the way from December 13th all the way through January 3rd. Do I have to notify those renters and let them know that the tax rate has gone up?

Jettie:  I'm afraid so, because the way the bill was drafted, it wasn't the actual payment day, it was the actual, once you stay in a cabin on this date.

Christine:  Uh‑huh.

Jettie:  So once we send notification and we realize this person has been notified, or now the radio will notify a lot of them, and we did go out, they couldn't out of ignorance say, "I didn't know about this." So it becomes effective July 1, and it's not by when you make your payment, it's actually about when you're staying in the cabin.

Christine:  I think the point to get across to listeners is that you guys are not some monster group out looking to‑‑I mean, I've read some of the message boards on some of the newspaper sites and stuff, and of course there are some derogatory statements about, "Oh, the government, they are just looking for a way to set people up, to get them in trouble." That's not really your goal or objective in this. You're really erring on the side of caution. You are not going to come after me for January 1st through the 13th because I didn't know about it.

Jettie:  Right, no. I mean, we're not wanting anybody to lose rent. That wasn't the goal of the county. And to implement anything, it's going to take time to notify people and all that. So we basically have said, the first month to three months will be kind of a training period. Of course, I'm not going to say there won't be any audits going at that time, but we're not going to go after anybody during those first three months.

After that the bill says there can be some audits, and of that, the county government, when we were discussing this, we said, "We know Day One, July 1st, everybody is not going to know about this deal. So it's going to take a little longer to get everything in order and get everybody notified." So we basically said, in the first one‑to‑three months is going to be a training period for us and them.

Christine:  Right, right. Gotcha. Now we always like to talk about the positive effects, and I know actually your county does a very good job of tourism ad campaigns. I've turned on the television many a times, and have seen advertisements for Tennessee for the Smoky Mountains.

I know a lot of that is generated from these tax dollars that the county gets from vacation rentals. Now, what's the motivation for this particular increase?

Jettie:  OK. The purpose of this 3% tax‑‑it's going to be 50% of the money we collect goes to our schools‑‑funding of our schools. The other 50% is going into marketing. The sole purpose of this market is for people that is outside the city.

Now I'm the collection agency, and I don't think the commission knows exactly for sure how we're going to market this, or if we're going to do this through our Economic Development Board, or how.

It can partly be used too for infrastructure, cause to deal with the amount of tourists we do requires a lot more infrastructure.

Christine:  Right. You need more police...

Jettie:  Right.

Christine:  ... you need more fire trucks‑‑you need more snow plows.

Jettie:  Right. But also we think through this‑‑cause a lot of individual property owners that rent their cabin‑‑if you're not in the city, you can't advertise in any of the city brochures. It's too expensive to advertise individually, so we're hoping we can do some kind of advertisement to help the individual property owners that's out in the county.

Christine:  Now that would be exciting, because I will tell you that's one of my annoyances. [laughs] Because I also own in Florida, and I can be on the county's website‑‑as a tax collector that's one of my privileges.

In Gatlinburg and Pigeon Forge I can't be on it, because I don't have a physical business in that area. So, that's exciting news for us! [laughs]

Jettie:  Like I say, we're not sure exactly how that marketing affect is going to be. I've talked to some of the different rental agencies that we've talked about. If we do like open our website to their county, these are the rental agencies outside our county, it would list them.

Maybe they might look at that if you want to put a little additional more money in, you can have your personal on site plan, or a picture of your cabin. Just like the city‑‑the more you pay, the more you get. Otherwise you would at least say, "These cabins are located outside our county. You can access them by doing this number."

Christine:  Right.

Jettie:  Or we might have a better location outside of Gatlinburg, outside of Pigeon Forge, or within so many miles‑‑but that part I don't know how we're going to do yet.

Christine:  Right. Well that's yet to be determined, but I think it's very important for the listeners to realize that this tax was brought on to improve the area. If you think about it, it's actually sort of a better way than increasing my property taxes, because schools are going to have to be paid for regardless.

Jettie:  Right.

Christine:  If you increase my property taxes, that comes directly out of my pocket. However, if you increase the Occupancy Tax than that's actually coming out of the tourists pocket.

Jettie:  Right.

Christine:  I don't believe that tourists will stop coming to the area. People love the Gatlinburg, and Pigeon Forge, and Sevierville County‑‑they love the Smoky Mountains. I don't think it's going to hurt tourism.

I think probably one of things that we have to as homeowners do when we're talking to the renters, is just tell them, "Hey, look the new tax rate is 12.5%, " and just sort of present it on a positive basis rather than saying, "Oh, well the new tax rate it's 12.5%. I can't believe they..." Because if you portray it negatively, that's going to be how...

Jettie:  Right.

Christine:  ... it's perceived by the traveler. So, it's important to not let them get upset about this. I don't believe that people will stop renting our homes because of it.

Jettie:  Well I don't think so, because as far as like I say the cities‑‑our four cities have already been collecting this for years. So if you stayed in the city, you already paid a higher tax rate then you did if you stayed out in our county.

Christine:  Right, right.

Jettie:  That's not showed an adverse, so hopefully this won't do the same thing. Plus in the long run hopefully we will get some type of advertisement that will help individual renters like you to get some kind of recognition through our website, or through some kind advertising to where your name's out there that can be advertised.

Christine:  Well that sounds great. Now, OK, I know that still this isn't answering a lot of people's individual questions. I know that everybody is going to have sort of questions that they might have that are specific to their situation. Who should they contact? Should they contact the county? Or, because we pay through the state, when I'm filling out my taxes what do I do?

Jettie:  OK, now your sales tax you do send to the state, the sales tax part of it. The 3% lodging tax you actually send to me, this is your county trustee's office. What we'll do, we're having forms printed right now, and the people that, the rental agencies and the people that we know are renting their... we will be sending you a form‑‑sometime in the first week of August we should have that back‑‑but the form has to be back in my office through August the 20th. If you have collected any taxes, you turn that back in.

Now, if it is not turned in by the 20th, then the property owner or the rental agency is responsible for any penalty.

Christine:  Right. Now, is this going to have to be collected quarterly, or is it going to be monthly?

Jettie:  Monthly, just like your sales tax. So when you turn in your sales tax, you'll turn around and do a lodging tax or property tax back to the county. Now, anybody listening that has not received any of this information, or wants to make sure they are going to be getting their form, they can call our office at 865‑453‑2767.

Christine:  OK, one more time, it's...

Jettie:  865‑564‑2767.

Christine:  OK, fabulous. And just speak to anybody in the office?

Jettie:  They need to ask for Angela or myself, Jettie.

Christine:  OK, Angela or Jettie, and they will help you get those forms.

If you have the form that we could show to our renters, I would love a copy of it, not only for my own personal use, because I am a homeowner, but also to put on our web site so if homeowners want to be able to‑‑if they didn't get the form and they need to start collecting that tax today‑‑they at least have some sort of form that they can email to the renter and say, "Hey look, this tax just went into effect. We're sorry, we didn't know about it, and here it is."

Jettie:  Sure. I'll be glad to send you the packet that we sent to the rental agencies, which is a copy of our law‑‑we did the entire law within the property act, it was passed and then we kind of briefly tell them what the law says‑‑and then we also explained the procedure about sending you the new form that you report your taxes on and everything. But I'll be glad to send you that, along with, once we get the forms back to report the tax on, we'll get that back to you also.

Christine:  Oh, fabulous. That would be wonderful, because I'm sure that there are a lot of listeners out there that are wanting to do this correctly. Nobody ever wants to get in trouble with the tax department.

And I guess the other thing that I want to point out through this conversation is, you can see that people in the tax offices are really helpful. They are there for you, they are there to help you. They are not your enemy, they are your friend.

Jettie:  That's right.

Christine:  Don't hesitate to pick up the phone and call, because people are afraid to call tax offices, I think.

Jettie:  We're very‑‑I think I have a very helpful staff, too, so if there are ever any questions about the lodging tax or property taxes, we will be very glad to help and assist in any way we can. We have a lot of out‑of‑state property owners who do call, or go on our web site to see things, that we are always anxious to hear from you or help anybody, local or out‑of‑state.

Christine:  Well very good. Well, thank you so much for agreeing to do this. It was very helpful, and once again, if you want to contact Jettie's office you can call. The number is 1‑865‑453‑2767, and again, you can speak with Jettie, who is the trustee, or you can speak with Angela. Either will be able to assist you, and we'll have information on the Owner Community about this as well. Thank you so much for joining. Have a great day.