The growth of vacation rental website Airbnb has exploded in Florida (as it has across the nation) in recent years, but it’s also alienated local government officials because its unlicensed vacation rentals have escaped being hit with sales or tourist development taxes.
That will soon change.
The San Francisco based tech-company that allows people to rent out their homes or rooms to travelers has made an agreement with county and state officials in Florida, and will begin collecting occupancy taxes beginning Dec. 1.
“We’re thrilled,” said Erin Sullivan, chief tax auditor for the Pinellas County property tax collector’s office. Sullivan said her office has been working with landlords on an individual basis who’ve rented out their proprieties to online travel companies the past few years to collect taxes, but the new development will improve the capture of those occupancy taxes “by leaps and bounds.”
Santiago Corrada, president and CEO of the Visit Tampa Bay, the tourism agency for Hillsborough County, called it “great news,” and adding it’s “a step in the right direction and absolutely the right thing to do.”
In a memo distributed to condo and homeowners in Florida who have been working with Airbnb, the company says that for reservations booked on or after Dec. 1 guests will see a line item for Occupancy Taxes on their bill.
If landlords have already been collecting occupancy taxes, they no longer will have to do so. The company said that “just like before, you’ll receive your accommodation fee minus the 3 percent Airbnb host service fee.”
The development is a huge win for tax collectors across the state. Their frustration with their inability to collect such taxes led one such official — Palm Beach County Tax Collector Anne Gannon — to file a lawsuit in January 2014 against four online travel companies, including Airbnb, alleging they had not been paying the county’s tourist development tax on vacation rentals they book. And although other Florida counties haven’t gone to court to challenge the San Francisco-based company, they’ve been as unhappy about their growth as their compatriots in Palm Beach.
“It’s turned into a free-for-all for the state of Florida. They’re not paying the tourist development tax, they’re not paying the sales tax,” Madeira Beach City Commissioner Elaine Poe complained to Florida Politics’ Ryan Ray in March. “The hosts are pocketing that money and Tallahassee has taken away most cities’ ability to do anything about it. It’s changing the residential character of our neighborhoods.”
Taxes will vary depending on where you rent an Airbnb location in Florida.
In Pinellas, that tax will be 5 percent, but it will rise to 6 percent beginning in January. There are 22 counties where Florida collects occupancy tax (including Bradford, Citrus, Columbia, DeSoto, Dixie, Flagler, Franklin, Gadsden, Gilchrist, Glades, Hamilton, Hendry, Holmes, Jackson, Jefferson, Levy, Madison, Okeechobee, Pasco, Sumter, Wakulla, and Washington). That will amount to 2 to 5 percent of the listing price, including any cleaning fee for reservations 179 nights and shorter.
In every other county, the transient rental tax is 6 percent, with a discretionary sales surtax of between 0.5 and 1.5 percent of the listing price, plus any cleaning fee (Airbnb says it will vary by county, and urges customers to visit the Florida Department of Revenue website for specific information).
Airbnb also collects taxes in the U.S. in Portland; San Francisco; Chicago; Washington; San Diego; Washington, D.C.; Philadelphia; Phoenix; and several cities in Southern California and in North Carolina.
Sullivan says that it’s impossible to know how much revenue Pinellas County has lost in recent years to Airbnb rentals, but with hundreds of condos and homes rented out every weekend without paying the county’s 5 percent tourist development tax it’s likely been considerable.
She also praised Airbnb officials.
“They really want to do the right thing,” she says, referring to how an Airbnb’s head of their tax department spoke at the Pinellas County Tourism Conference in July, and reached out to the Tax Collector’s office at that time.