NEWS
How should short-term rentals be taxed? County officials couldn't agree, a lawsuit ensued
The county assessor is suing the treasurer over the reclassification of more than 1,000 properties
The Bernalillo County treasurer and assessor are fighting over how short-term rentals should be taxed again. And now that power struggle is headed to civil court.
Assessor Damian Lara named Treasure Tim Eichenberg in a civil suit in 2nd Judicial District Court on Monday and sent a letter to the State Ethics Commission, alleging a conflict of interest.
鈥淢y responsibility as a steward of taxpayer money is that I am not allowed to turn a blind eye,鈥 Lara said Tuesday.
The argument began after Lara reclassified more than 1,000 short-term rental properties like Airbnbs as commercial, raising their taxes by approximately $1.8 million.
Some say the policy will increase housing supply for permanent residents by discouraging short-term rentals, with the added benefit of raising tax revenue for the county.
Others say the policy is destroying small business owners鈥 livelihoods and is an unfair double taxation.
But at the root of the spat is not the policy itself, but the politics.
Lara said reclassifying the properties was within his authority, while concurrently, Eichenberg said he was within his rights to reverse Lara鈥檚 decision.
This infighting comes ahead of an election year, when incumbent Lara is being challenged by longtime official and current Deputy Treasurer Linda Stover.
鈥淚 find all of this is nothing more than fluff for a desperate man in a political campaign,鈥 Eichenberg said of the lawsuit.
In the lawsuit, Lara claims that Eichenberg unilaterally overrode his policy and reverted more than 1,000 properties back to their residential classification. As a result, those properties, which Lara said are business enterprises not homes, saw significantly lower taxes.
Lara said that decreased revenue could result in funding cuts to essential services like fire departments, law enforcement and infrastructure projects.
鈥淏ecause this is such a serious issue, we don't want to have this ripple effect into the coming years,鈥 Lara said.
Meanwhile, Eichenberg argued that Lara had no authority to reclassify the properties in the first place.
According to the tax code, treasurers can correct 鈥渙bvious鈥 mistakes and make clerical changes. Lara argued that overwriting an intentional policy is wildly different from correcting a clerical error.
Eichenberg disagrees, saying that he blocked an unlawful change and acted as a check and balance.
鈥淲hat is considered a clerical error?鈥 Eichenberg said. 鈥淚s that you hitting a button too many times so a zero is added, or is that you hitting a button once, where you change residential to non-residential for a thousand properties? Either way you look at it 鈥 I think that's a clerical error.鈥
Lara also alleged in the lawsuit and letter to the State Ethics Board that Eichenberg operated a tax consultant business during his term.
鈥淚 knew it would be a conflict,鈥 Eichenberg said Tuesday. 鈥淭hat鈥檚 why I sold it.鈥
Eichenberg said he sold the consulting business mentioned in the lawsuit in 2024 to a longtime employee after he won the Democratic primary.
When asked about Eichenberg鈥檚 statement, Lara said that the ethics commission would ultimately determine whether Eichenberg had truly severed all financial ties with the business.
鈥淚t鈥檚 a shame we don鈥檛 talk anymore,鈥 Eichenberg said. 鈥淭his is something that should be duked out over a beer, not in a newspaper.鈥
Gillian Barkhurst is the local government reporter for the Journal. She can be reached at gbarkhurst@abqjournal.com.