Local Business License Required As Well

Silver City -- Owners of short-term rentals in Silver City and throughout the state are now required to pay the same five-percent lodgers' tax that hotel and motel operators pay, thanks to legislation passed during the recent session of the New Mexico State Legislature.  The new law takes effect January 1, 2020, allowing municipalities to begin registering such businesses and collecting tax on all rentals of 30 days or less.

"We don't expect to see much revenue in the first year, given that we need to work on compliance, but longer term this will certainly even the playing field for owners of lodging facilities in Silver City," said town manager Alex Brown. "This legislation creates a more equitable situation for those who earn income on visitor and guest overnight (or longer) stays."

A 2017 report by the New Mexico Hospitality Association, which long advocated for a more equitable playing field, found that Airbnb had surpassed Marriott Hotels  - considered the largest hotel chain in the world - in the total number of rooms for rent around the globe.

At the April 23rd town council meeting Brown reported that he expects lodgers' tax receipts to total some $310,000 by the end of the fiscal year, ending June 30.  By law, at least 50 percent of lodgers' tax collected must be used to promote tourism and related activities, and put "heads in beds." Remaining funds may be used to collect and administer the tax, fund tourism-related facilities, transportation and certain capital improvements.

Silver City landlords are required to pay five percent of gross rental receipts no later than the 25th of each month, and file a report in the billing department at City Hall, 101 W. Broadway Avenue. Reports must be filed even if no income was earned that month.

But the first stop for landlords is the town's Community Development Department and the desk of Maria Stacy, planning technician, who will help them with their business license application.  A business license is required for each rental property. To obtain a license, landlords must provide a current driver's license and New Mexico tax identification number, which may be obtained online through the state Taxation and Revenue Department at tap.state.nm.us.  

A site plan is also required for each property, showing the total number and size of sleeping rooms, as well as allotted parking areas.  Parking requirements vary depending on where the property is located, with some areas requiring off-street parking. Site plans need not be complicated, said Stacy, and she and other department staff are available to help landlords easily meet licensing requirements.  The cost of the annual business license is $35, and must be paid at the time of registration.

Landlords will have some time to comply with the new law, said Jaime Embick, community development director, noting that code enforcement will begin notifying those who have not yet registered their short-term rentals later this year. Earnings from short-term rentals are also subject to the town's eight-percent gross receipts tax.

For more information, contact Maria Stacy, planning technician, at (575) 597-7028; email: mstacy@silvercitymail.com.