SOUTH PADRE ISLAND — After weeks of opposition from some property owners, City Council members Wednesday took the first step to crack down on rental property owners who fail to pay as much as $300,000 a year in hotel occupancy taxes.
In a meeting, council members unanimously passed the first reading of a proposed ordinance that would charge $50 to register individual rental property units. Owners would face a fine of $500 a day for violations.
“Not everybody completely agrees with everything but I think we’ve come an awful long way,” Councilman Dennis Stahl, who pushed for the proposed ordinance, told a group of rental property representatives.
Stahl said officials agreed not to charge $50 registration fees to rental property owners who pay hotel occupancy taxes.
Officials found that owners of about 1,000 units do not pay hotel occupancy taxes, which add up to an annual loss of as much as about $300,000 here.
“It’s not punitive,” Mayor Barry Patel told the group. “This is a very vital industry for South Padre Island. This is to get better compliance, which we’ve been struggling for many years.”
The ordinance would require properties that rent for less than 30 days to register each unit, listing ownership information. The ordinance would also require that properties designate representatives to handle any complaints, making them available 24 hours a day, within distances of one-hour drives.
Violators would face daily fines of as much as $500.
Terri Galloway, general manager of Suntide II Resort Condominiums, told council members that the proposed registration process, including the collection of property owners’ information, would take long hours and hard work.
“This is a whole lot of extra work for anyone in the rental businesses,” Galloway told council members.
Galloway said Mexican property owners rent their units to friends and family in Mexico, leaving city officials with “no detail, no history” of records.