The punishment for evading bed taxes in Grover Beach just got heavier for one former short-term rental operator.
On Feb. 14, the beach city reached a settlement with resident Allen Thompson who skipped paying transient occupancy taxes (TOT) for two years while he ran a vacation rental. The agreement concluded a months-long deliberation between Thompson and city officials, which was marked by a heated City Council hearing and a lawsuit.
However, Thompson is now required to pay a penalty that’s higher than estimated in previous discussions. According to the settlement agreement, he owes Grover Beach $39,043.75. City Attorney David Hale told New Times that the City Council approved the settlement in a closed session meeting on Feb. 14. City staff handed the signed agreement to Thompson on the morning of Feb. 15.
“He has seven days to send a check to the city,” Hale said. “[The settlement amount] is inclusive of interest and penalties.”
Grover Beach filed a lawsuit against Thompson on Jan. 20, which estimated his unpaid TOT amount to be $10,000 less than the settlement number. The new agreement said that the lawsuit will be dismissed with prejudice once Thompson pays the settlement sum that spans TOT he missed since at least January 2020. The city revoked his rental operator license last August after Thompson attempted to defend his decision to not pay taxes.
At that defense hearing, city staff gauged that his missed taxes totaled up to a little more than $16,000. Grover Beach officials found it tough to nail down an accurate number because Thompson refused to have his books audited. Hale told New Times that his books still haven’t been investigated.
“It was not part of the settlement negotiation,” he said. “We based the [settlement amount] on the number of times he booked people [into the rental]. We hired a consultant from Southern California, and he based it on computer-assisted data.” Δ
This article appears in Feb 16-26, 2023.