Thursday, July 12, 2012

LA Councilman Cautions UCLA on Hotel Tax Liability

In prior blog posts, we have noted that UCLA's proposed hotel/conference center depends on filling its 250 rooms for financial success.  But it can't take commercial business and be tax-exempt or depend on tax-exempt financing.  We also noted that other related UCLA facilities' policies with regard to taking in guests tax-free could be at risk if there is scrutiny of what is planned for the hotel.  LA Councilman Paul Koretz has notified the Regents of UCLA's potential tax problems with the City and the issue of a public tax-free hotel competing with private tax-paying hotels.  He points to what seems to be commercial business in the hotel's business plan and contradicts the assertion in the plan that no tax will be owed.  You can read his letter at the link below.

Most folks like to avoid tax trouble and will alter their behavior accordingly.  There is no sign so far, however, that UCLA intends to deviate from the current proposal.  Perhaps the current administration hopes that when the taxman arrives some time in the future, someone else will be in charge.  What other explanation could there be?

Like it or not, the taxman cometh!


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