County tax collector, Airbnb at odds again

Registration policy ensures tourism fees are paid, she explains.

The latest flashpoint is a series of new rules for registration of short-term rentals; Airbnb calls them “hostile” to the industry.

A simmering feud between a key county official and the popular Airbnb online marketplace for travel has boiled over.

The latest spark is a series of new rules the Palm Beach County Tax Collector is rolling out to regulate short-term property rentals. In response, an Airbnb policy director has called the tax collector “hostile” toward the industry.

Tax Collector Anne Gannon said the goal is to make sure all hosts — meaning the owner of the room, unit or property — offering vacation rentals are registered. She said hosts are already required to register, but many have not.

Gannon said she also wants to bring the owners renting their properties into compliance with paying tourism development taxes, also known as bed taxes, levied on all hotel stays and vacation rentals of six months or less. The money the bed tax generates helps market the county as a tourist destination.

The Palm Beach County Commission gave the proposed rules an initial approval this past week, and will vote on it a final time in October.

Tom Martinelli, policy director for Airbnb Florida, told the commissioners at the Sept. 18 meeting that the new policy is a “shakedown-style ordinance.” He also said some of the requirements violate federal privacy acts, but Gannon’s attorneys disputed that.

The measures have added a new phase to an already contentious relationship between Gannon and Airbnb. Gannon in 2014 filed a lawsuit against Air BNB Inc., HomeAway Inc., TripAdvisor LLC and CouchSurfing International Inc. alleging the companies had not registered as rental dealers.

The suit alleged the companies were not collecting or paying the county’s 6 percent tourist development tax on vacation rentals booked through their sites. The lawsuit is still playing out in court.

The new rules seem to reiterate existing policy for the owners of the rental property. Hosts offering lodging are already required to register with the tax collector’s office.

They also have to file a monthly report and pay the tax collector the 6 percent bed tax that is charged to the renter. And they have to submit sales taxes, but those dollars go to the state department of revenue. And, the property owner has to pay $33 annually for a business tax receipt, since the property is being used as a business.

But the new rules spare hosts from having to submit the monthly report or bed tax if they rent their

space through online platforms such as Airbnb. That’s because the tax collector is now placing that burden on the online platform.

That’s where the larger changes come in.

The online sites, and booking services such as a Realtor or property manager, must verify that every property they are going to list is registered with the tax collector’s office and has met the business and bed tax collection requirements.

If they have not complied, the property cannot be listed. Also, the companies have to give the tax collector a monthly report of each property advertised, the property’s tax collector account number, the parcel ID number, the address, name of host, total number of nights rented and amount paid per stay. And, they must collect and remit the required bed tax on all rental activity generated.

A hosting platform, booking service, or host that violates any part of the ordinance could receive up to a $500 fine per day per unit.

Martinelli told the commission the information his company will be required to give the tax office is a violation of the Stored Communications Act. He said Airbnb would rather collect the bed taxes without handing over that information. Airbnb has agreements with 39 Florida counties to do so.

Airbnb also has an agreement with the state’s revenue department to remit the sales tax collected.

But Gannon’s office said it won’t sign on to Airbnb’s agreement because that would leave them without an audit system.

The ordinance would also allow the tax collector to subpoena the online travel companies for records.

Gannon says her office has 3,000 properties registered for short-term rentals, including hotels and motels. She said she knows there are more that are not registered but cannot quantify how many.

“We are working with a software provider to overlay the Internet rentals to our property records to identify them. It is a long, tedious process. Requires a great deal of staff time,” she said.

But, the tax collector’s office has already gotten some help. The commissioners have received dozens of emails from Airbnb hosts with concerns about the new rules and as the emails come in, Gannon’s office is checking the names against her database of registered rentals. She said about six of them are registered.

Some of the hosts told The Palm Beach Post they thought Airbnb was taking care of everything.

Roger Stjernvall, who said he wrote to the commission after being alerted by Airbnb, told the Post he is not registered with Gannon’s office. He said he thought Airbnb handled all the necessary taxes for his Lantana property. Airbnb lets him know how much money his guests pay in “occupancy taxes” and that the company remits them on Stjernvall’s behalf, he said. He thought that was bed taxes. But Airbnb said they do not collect bed taxes in Palm Beach County and Gannon said her office has never received money from Airbnb.

“I have gone in good faith that everything is taken care of,” Stjernvall said.

Paul Colletti wrote to the commissioners after he, too, was notified by Airbnb. He rents his Boynton Beach property for supplemental income. He also said he is not registered with the tax collector and thought Airbnb was collecting a bed tax.

Martinelli said there are about 1,000 homes in the county listed on Airbnb. When the commission asked how many were registered with the tax collector, he said “a lot of them” but didn’t have a number.

County Commissioner Hal Valeche said to Martinelli: “They’re not complying with the law if they’re remaining anonymous. You’re protecting their confidentiality but you’re protecting them in their effort to evade their responsibilities.”