Corbin considering lawsuit against local motel for delinquent taxes

Corbin city leaders say they are fed up with a local motel’s refusal to pay back taxes, and are planning likely court action sometime after the Christmas holiday if owners don’t pay their bill.

The issue came to the surface again Monday during the regular monthly meeting of the Corbin Tourism and Convention Commission. Tourism board accountant Kyle Perkins told members that Mountain View Lodge had failed to pay any of the city’s four percent "transient" room tax since November of 2009.

"Our office is responsible for monitoring the revenue, however, if a taxpayer falls delinquent, that actually needs to be moved up to the city level," Perkins told the board. "The city has the power to enforce collection of the taxes."

The problem has been simmering for over a year as Perkins has repeatedly informed the board of the tax delinquency. He said his office has had frequent contact with Corbin City Attorney Bob Hammons about the issue in the past. No action has been taken.

On Tuesday, Hammons said legal action against Mountain View Lodge would likely be filed, in the form of a civil lawsuit, shortly after Christmas.

"I need to meet with the tourism board and discuss it with them, but we are going to have to take some legal action on it," Hammons said. "I just have to get authorization to proceed … I wouldn’t imagine once it is filed that it would take long. We will get a judgment."

That authorization would have to come from the city’s five-member Board of Commissioners.

Corbin Mayor Willard McBurney said Tuesday that he was unaware of the ongoing tax problems with Mountain View Lodge, but that something needed to be done soon. He said two years was too long for any business to go without paying taxes it owes to the city.

"I want to see action. I think the whole city commission would be for that," McBurney said. "We expect those taxes to be paid."
Corbin City Commissioner Joe "Butch" White, himself a local tax professional, said the situation surrounding Mountain View Lodge should be dealt with swiftly and that he too was unaware they were so far in arrears.

"They need to be padlocked if they are not paying their taxes," White said. "You better believe its something I intend to bring up at the first opportunity."

Mountain View Lodge Owner and Manager, Theresa Kranz, told the News Journal Tuesday that Tourism Commission officials were wrong in their assessment of her motel’s tax delinquency.

"The taxes were caught up through 2010. My accountant is working on that. They are wrong," Kranz said.

Kranz would not provide the name of her accountant. She said she did have documentation to show the taxes had been paid to the city through 2010, but ended the interview shortly thereafter and would not provide the documentation.

When asked why Mountain View Lodge had not paid any of the transient tax for 2011, she simply said "I don’t know."
Perkins disputed Kranz claims of payment.

"We don’t have any records to reflect that what she is saying is in any way accurate," Perkins said.

Three percent of the taxes collected on all room rentals at hotels and motels in Corbin are used to fund the activities of the Tourism Commission. The remaining percent, which the Corbin City Commission approved in 2009, is used exclusively to fund operations at the Southeast Kentucky Agriculture and Expo Center.

Perkins said collection of the tax has been an issue at various times in the past, but that normally motel and hotel operators pay fairly swiftly after being notified of delinquency. A case like with Mountain View Lodge is rare.

"There’s really kind of an issue there," Perkins said. "There are no real strong procedures to enforce these taxes."

Mountain View Lodge has been delinquent prior to 2009, but eventually paid. The motel opened in 2007.

Mountain View Lodge was cited by the Corbin Code Enforcement Officer earlier this year for failure to purchase a business license. Owners eventually relented and bought a license.

Perkins told the Tourism Commission that another local motel, Landmark Inn, was also delinquent. Owners of that motel have not paid transient taxes for the most recent two quarters.

In other business, the Commission:

• Voted to donate $1,000 to organizers of the Border Bowl – a football game between outstanding high school players from Kentucky and Tennessee, held annually at the James H. Taylor II Stadium on the campus of the University of the Cumberlands in Williamsburg.

Brad Ingle, who represented the Border Bowl, asked tourism officials for $10,000. Perkins told the board that to give that large of a donation would deplete most of the group’s budgeted discretionary funds.

The game will be played Jan. 7. The Whitley County Tourism Commission has pledged $5,000 to the event. It is normally televised on WYMT in Kentucky.

• Met behind closed doors for about 15 minutes in an executive session to discuss personnel matters. No formal action was taken.