County attorney and tax collector get commission go-ahead to forge agreement with Airbnb

Negotiations designed to lead to a document modeled on one Airbnb recently signed with Hillsborough County

County Attorney Stephen DeMarsh. File photo

With three commissioners voicing concerns — including two airing frustrations over attempts to circumvent local and state regulations — the Sarasota County Commission has told County Attorney Stephen DeMarsh to proceed in trying to negotiate an agreement with Airbnb.

During the board’s regular meeting on Jan. 24 in Sarasota, DeMarsh referenced a memo he had provided in the packet. His recommendation, if the commissioners chose to accept it, was to have his office work with Sarasota County Tax Collector Barbara Ford-Coates and representatives of Airbnb to forge an agreement for Sarasota County modeled on one the internet-based accommodations service recently inked with the Hillsborough County Attorney’s Office.

DeMarsh also recommended that both Sarasota County and Ford-Coates be signatories to the agreement. Although Ford-Coates heads up a county office, she is a constitutional officer.

Based on 2016 data, the memorandum said, Airbnb indicated that Sarasota County Tourist Development Tax revenue from bookings through its platform totaled “approximately $355,000.

Commissioner Nancy Detert was the first to tell DeMarsh she favored his moving forward as he proposed. “I’ve kind of changed my mind on my position on this over the years. At first, it looks like just a tax dollar grab, and I don’t think we need to hunt for every penny in people’s pockets.”

However, she added, since she was elected to the County Commission last year, she had been hearing “a groundswell of people who want [short-term rentals] regulated.” During her travels around the county, she continued, she especially had heard complaints from people who live in mobile home parks. Many of them, she noted, are year-round residents or snowbirds who live in the area the majority of each year.

“They’re used to seeing the same faces in their community. They feel safe there,” she pointed out. “And, all of a sudden, thanks to Airbnb and [similar services], there’s short-term rentals [in those mobile home parks].”

Commissioner Nancy Detert. Rachel Hackney photo

Detert added that in years past, people viewed “short-term rentals” to mean a week. “Now it’s days, so you can have people coming and going,” and residents are not sure whether those people are supposed to be in the community.

She told her colleagues, “To me, it’s not about the revenue anymore. It’s about the safety of the residents, so that they know who’s in their own community.”

Commissioner Alan Maio pointed out that, for over a decade, he has owned out-of-state property that he rents to guests on a short-term basis. “I’ve been hit with and paid every single thing I have been charged,” he added. He then paused and said his wife had paid the fees and taxes.

“I’m tired of hearing that they bob and weave and dodge and don’t pay the Tourist Development Tax,” he said of Airbnb. “I’d like them to be in the same situation as my wife.”

Commissioner Charles Hines, who chairs the county’s Tourist Development Council, told his colleagues, “This is a big deal now, and it’s a clear and unfair disadvantage” for folks who collect the Tourist Development Tax [TDT] to compete against those who do not. Airbnb and similar entities “have allowed this non-collection to occur, and so we’ve got to hold ’em to it.”

The county uses the TDT revenue to pay for a number of worthwhile endeavors, Hines pointed out. For example, he noted, the board was preparing to hear a discussion later that morning about county negotiations with the Atlanta Braves regarding a Spring Training complex in the West Villages near North Port.

The county has pledged $22.1 million in TDT revenue to help cover the cost of the proposed facilities.

Hines then said he would accept DeMarsh’s recommendation, too.

When Chair Paul Caragiulo asked DeMarsh if he had what he needed, DeMarsh replied, “Yes, I do.”

Airbnb featured this scene in its website banner last fall. Image from the website

When The Sarasota News Leader contacted Airbnb in December 2016 — following an earlier County Commission discussion — Benjamin Breit, the firm’s public affairs director for Florida, wrote in a Dec. 19, 2016 email, “We have recently had productive conversations with the Sarasota Tax Collector’s Office and remain optimistic that we will be able to move forward on an agreement that will allow Airbnb to collect and remit tourist development tax dollars on behalf of our hosts. We’ll continue to move forward with conversations in whatever pace the Tax Collector prefers. We work with counties on an individual basis to help ensure that the local home sharing rules and regulations work for them.”

The memo

DeMarsh noted at the outset of his Jan. 24 remarks that his Jan. 18 memorandum — a report the board had requested — was “quite detailed.” It explains that Airbnb, which is based in San Francisco, contracts with property owners for use of its online platform and then charges guests a 9% service fee; the host pays a 3% fee for use of the platform.

DeMarsh’s memorandum adds, “Both service fees are separately stated to the Guest and the Host apart from the rental cost of the property.”

Sarasota County Tax Collector Barbara Ford-Coates holds an award she recently received from a state organization. Contributed photo

Section 125.0104 (3)(a)1 of the Florida Statutes says that “every person who rents, leases, or lets for consideration any living quarters or accommodations, in any hotel, apartment hotel, motel, resort motel, apartment, apartment motel, rooming house, mobile home park, recreational vehicle park, condominium or timeshare resort for a term of 6 months or less” is subject to payment of the Tourist Development Tax.

Ford-Coates’ office handles the payments in Sarasota County.

As Ford-Coates has explained to the commissioners and the Tourist Development Council members, the initial collection agreements Airbnb signed with Florida jurisdictions “included provisions that many counties were not willing to accept,” as DeMarsh put it in the memorandum. “The primary concerns were the anonymity of property owner information, the requirement that the County give up its ability to seek prior TDT revenues, auditing limitations and confidentiality requirements.” However, he continued, “Over the last several months, Airbnb has conceded its request for confidentiality of agreements and has [accepted] provisions that do not waive the County’s right to seek property owner information, auditing data and past revenues.”

Among the provisions of the Hillsborough County agreement, the memo notes, are the following:

  • Airbnb has assumed liability for any failure to report, collect and/or remit the correct amount of TDT, based on what a guest paid.
  • The Hillsborough County Tax Collector’s Office will audit Airbnb on the basis of TDT returns, instead of auditing any individual guests or hosts, “unless and until [DeMarsh’s emphasis] an audit of Airbnb by the Tax Collector has been exhausted and the matter remains unresolved,” the memo explains.
  • Nothing in the agreement will prevent the Hillsborough County tax collector from seeking TDT revenue generated by Airbnb transactions prior to the signing of the document.

• Airbnb has agreed to maintain a complete record of its hosts’ property in its records, according to Florida law, and it will notify hosts and guests that the TDT will be collected and remitted to the tax collector.