The Santa Barbara County Board of Supervisors discussed two attempts to appeal transient occupancy tax bills from Montecito and Lompoc short-term rentals, the former being denied and the latter being halted.

A transient occupancy tax, or a “hotel tax,” is a municipal fee charged to hotels, motels and short-term rentals. While the tax is paid by guests, the operator has the responsibility to remit the tax to the county on a monthly basis.

One of the appeals was filed by 15 Miramar Club LLC, which owns a Montecito vacation home on Miramar Lane and had unpaid TOT and tourism business improvement district assessments. According to an audit by county staff from April 2022 to March 2025, a total of $192,250.74 was unpaid, with a requested waiver of $38,656.96 and a payment plan for remaining taxes and assessments.

Olesya Kurnosova, a certified public accountant for 15 Miramar Club LLC, argued that the penalties should be waived, since the property’s owner, Amber Andrews, purchased the short-term rental in March 2022 while suffering from cancer and was “in and out of hospitals” until her passing in April 2025. According to Kuronosova, the family has since been remitting TOT but faces cash-flow challenges.

While the county supervisors expressed sympathy toward the situation, they argued against the appeal out of fairness to other compliant operators and the strict nature of the ordinance.

“I feel for the people who get stuck in these situations, but there’s a basic fairness and obligation that we have up here to enforce these rules, and I’m comfortable with it,” Fourth District Supervisor Bob Nelson said.

The board unanimously voted to deny the appeal and upheld the full assessment, including penalties and interest, following recommendations of county staff.

Following the rejection, Jeremy and Megan Raff requested an appeal of $65,840.11 for Dare 2 Dream Farms in Lompoc, which provides organic food and farming education, as well as providing short-term rentals.

According to county staff, the Raffs operated short-term rentals without remitting TOT from April 2022 to March 2025. The Raffs argued that they were caught in an eight-year “regulatory gray area” while the county developed their current agricultural enterprise ordinance framework, which helps sustain the economic viability and diversity of agricultural operations in unincorporated areas of the county, and enforcing those back taxes essentially would put the farm out of business.

“We are not asking to avoid compliance going forward. We are asking for a fair transition into compliance, one that does not claw back the community-serving work that this farm has built,” Megan Raff said.

Third District Supervisor Joan Hartmann argued that this case is different from other vacation rentals, given that the AEO was adopted by the county to benefit local agricultural operations.

Fifth District Supervisor Steve Lavagnino also acknowledged the unique circumstance, and while he didn’t support waiving the bill entirely, he said he wanted to find a “creative” solution.

First District Supervisor Laura Capps argued that appealing the case could set a negative precedent, arguing that other operators could see the case as a way to dismiss paying TOT.

“You clearly knew that you needed to pay, and it seems as though there was a defiance there, and that’s what’s giving me pause about trying to work out a deal,” Capps said. “If there can be something to work out, I’m all in, but maybe it takes a little more time, so it’s not just, ‘Hey, you don’t have to pay your bill today.’”

The supervisors did not rule on the appeal, but rather unanimously voted to continue the item to their Aug. 25 meeting to further develop legally defensible options in order to address the bill while preserving the farm’s operations.