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Vacation community businesses in Vermilion feel the burden of bed tax in Erie County

Posted at 9:08 AM, May 10, 2019

VERMILION, Ohio — New bed taxes are affecting businesses in Erie County. The county and Vermilion say they’re necessary to make sure everyone who’s a tourist pays their fair share.

The doors in the Old Vermilion Jailhouse don't lock anymore, but running one of the most unique places to stay in Ohio has owner Markos Paradissis locked in to running his business in a way he'd rather not.

A change to how much tax is collected on short-term rental properties (units rented out for fewer than 30 days) in Vermilion has already made the price too steep for two of Paradissis' customers.

"When I told them the price, 'Sorry,' they didn't want to pay it," said Paradissis.

Bed taxes have been around for a while in places like Erie County, where tourism is a $2 billion industry every year.

But for 2019, cities like Vermilion are following a move the county made later year, changing who has to pay the bed tax. Vermilion and other cities are adding on a 3% bed tax on top of Erie County's 4% tax.

One of the biggest changes is applying those taxes to all short-term rental properties instead of just the ones that rent out five or more units.

That means places like the Old Jailhouse are now subject to a tax they never had to pay before.

"So now my thinking is I'm going to have to eliminate some of my perks in the business," said Paradissis.

Just to keep the cost down for the customer, Paradissis says he won't be able to offer $20 in gift cards to local restaurants and other special items that make the stay nicer.

Local leaders say the point of the tax is to make sure that the rising number of tourists who stay in Airbnb's still pay up.

"We're seeing more and more people move away from hotels and and going to that type of stay when they're here," said Erie County Commissioner Matt Old.

Erie County's bed tax fund tourism projects. Half of the $5,689,924 that came in during 2018 went towards the Lake Erie Shores and Islands tourist information center.

The other half funds two new sports complexes, both run by Cedar Fair, who owns the Cedar Point Amusement Park.

"The county doesn't know anything about running attractions," said Old. "Cedar Point is the best operator in this part of the country."

Vermilion Mayor Jim Forthofer says the summer season means wear and tear from tourists no matter where they stay.

"They all drive on our roads, they all drink our water they all do the same things all the residents do, so the additional tax helps to cover some of those things," said Forthofer.

"We just try to explain to everybody that if you're a tourist coming to this region, there's a tax to be a tourist and it's the only thing we can put exclusively on tourists to benefit our whole community," said Old.