Local Business Taxes
Hello,
I bought a number of single family rental houses earlier this year in one City. I get a notice from the City today that my business taxes are delinquent. Apparently, they want me to pay $35 per rental unit per year because they consider each rental property a "business location." They also told me I will be getting a notice soon from the county with another set of county business taxes.
Does anyone know of any loopholes to avoid this? It seems that if I admit that these are rentals (ie "business locations"
that I am going to be inundated with City taxes, county taxes, occupational taxes, occupancy taxes, personal property taxes, etc.
Is it legal for them to consider each rental unit a "business location"? The properties are held in a trust. The beneficiary is my LLC, who pays its own business taxes. Is this double taxation? Also, how do they know it's a rental? I suspect they are just "fishing" by sending out letters to title holders who are trustees and companies in hopes that someone will send in the tax.
Any opinions out there?
Heather
You don't say where these rentals are located, so I doubt we can comment specifically.
Montgomery County, MD requires a rental dwelling license for each rental property in their jurisdiction. Fee, this year, is $65 per unit. This is just another cost of doing business, in addition to the property taxes, and income taxes.
They may not know that it is a rental, but they have a pretty good clue when you are not using the residential dwelling unit as your primary residence. Don't you have to tell the tax assessor when you record the deed that the property is non-owner occupied?