For 6th year in a row, hotels and motels generate largest portion of county’s ‘bed tax’ revenue

March 2022 had highest monthly collections on record

In Fiscal Year 2022, “For the sixth year in a row,” hotels and motels surpassed condominiums in the amount of Tourist Development Tax (TDT) — or, “bed tax” — revenue generated in Sarasota County, Sherri Smith, chief deputy Sarasota County tax collector, has reported to the county’s Tourist Development Council.

Altogether, Smith told the Council members on Feb. 9, the funds that hotels and motels turned over to Tax Collector Barbara Ford-Coates’ office made up 41.56% of the total revenue. Condominiums accounted for 31.03%, she added.

Thus, Smith said, the hotels, motels and condominiums combined generated 72.59% of the TDT funds the county collected in the 2022 fiscal year, which ran from Oct. 1, 2021 through Sept. 30, 2022.

Houses collected 4.85% of the funds during the last fiscal year, she continued, followed by apartments at 2.36% and campsites at 0.3%.

A chart in the written report the Tax Collector’s Office produced on the 2022 fiscal year says the number of hotels and motels in the county was 94 at the end of 2022, which was four fewer than the total at the end of 2020. The number of condominiums collecting the TDT also had declined from Dec. 31, 2020, when it was 5,706. As of Dec. 31, 2022, the number was 5,392.

However, the number of houses used for tourism rentals climbed over the three-year period, the chart shows. The number was 1,561 as of Dec. 31, 2020. By Dec. 31, 2022, it was 1,642.

Additionally, Smith pointed out to the Council members, online rental platforms — including Airbnb — turned over 19.76% of the TDT revenue in the 2022 fiscal year.

The tax is charged on rentals of accommodations for six months or less time. In 2021, Sarasota County surpassed the necessary state threshold to raise the tax from 5% to 6%. The increase went into effect on Oct. 1, 2022, the start of the 2023 fiscal year.

During the Tourist Development Council (TDC) meeting, Angela Nicoloso, director of processing and tax services for the Tax Collector’s Office, noted that the TDT revenue broke a record in the 2022 fiscal year, adding up to $40,285,023.32, which was 29.81% higher than the 2021 fiscal year amount.

In the 2021 fiscal year, the TDT revenue surpassed the $31-million mark for the first time, as noted in the formal report from Ford-Coates’ staff regarding details of the 2022 fiscal year collections.

The report provided to the TDC members noted that the collections did not exceed the $20-million mark for the first time until the 2016 fiscal year.

Nicoloso added that the November 2021 collections marked the largest month-over-month jump for revenue in FY 2022 — 76.35%. That was followed by December 2021, when the calculation was up 68.16%, compared to the figure for December 2020.

In March 2022, Nicoloso said, “We had the highest collection month ever,” with the total surpassing $6 million. Both the January and February 2022 totals went over $4 million, she said.

Among other data, Nicoloso noted that, as of Dec. 31, 2022, the Tax Collector’s Office had 7,572 TDT accounts, a figure higher by 1.95% than the total for 2021.

During the 2022 fiscal year, Smith pointed out, 1,075 new accounts were added to the Tax Collector’s Office list.

Online accommodations platforms a growing factor in collections

Smith also reported on the locations that turn over to the Tax Collector’s Office the largest amounts of Tourist Development Tax revenue each year.

“Traditionally,” she said, “the City of Sarasota and Siesta Key generate the highest portion of collections,” Smith said, “and this held true for 2022.” She added that, through Dec. 31, 2022, the city had “pulled ahead, with 27.52%, followed ever so closely by Siesta Key,” which had reported 25.9% of the total.

The online platforms were responsible for 19.76% of the money, Smith said.

In regard to those platforms, Smith first told the Council members about the revenue that Airbnb had collected from its hosts to deliver to the county. She noted that May 2017 was the first month that the company provided the funds to the Tax Collector’s Office, thanks to an agreement on which the Office of the County Attorney and Tax Collector Ford-Coates had collaborated.

For the 2017 fiscal year, Smith said, the Airbnb total was $310,000. That climbed to $1.1 million in FY 2018; to $1.6 million in FY 2020; to $3.9 million in FY 2021; and then in FY 2022 to $5,048,492.

Altogether, through the last fiscal year, she added, Airbnb had delivered to the county approximately $15.5 million.

The Office of the County Attorney, with the approval of the County Commission, also helped the Tax Collector’s Office secure contracts with HomeAway and TripAdvisor, Smith continued. Those contracts require the platforms, plus all of their subsidiaries, to collect the TDT revenue that their county hosts receive, she added.

However, Smith pointed out, unlike Airbnb, the companies have refused to allow the Tax Collector’s Office to specify how much of the tax revenue each of the companies generates. (The TDT Location chart that Ford-Coates’ staff produces each month, showing how much money comes from each municipality and the unincorporated areas, includes the general heading, “Online Platforms.”)

The HomeAway and TripAdvisor contracts date to April 2019, Smith said. Since then, they have delivered $7.7 million in TDT revenue to the Tax Collector’s Office, she added.

When Commissioner Nancy Detert, who chairs the Tourist Development Council, asked whether the Tax Collector’s Office gets TDT revenue from hosts, Smith replied that it does.

“Glad we have those covered,” Detert responded.

During her remarks, Smith also talked about the Tax Collector’s Office’s pursuit of delinquent collections.

First, she pointed out, “The number of delinquent accounts has remained consistently low over the last several years.”

In any given month, when a regular account does not report its TDT funds to the staff in a timely fashion, Smith explained, the holder of the account is contacted “by our friendly yet very persistent enforcement team.” That remark drew laughter from the TDC members, a number of whom have been on the advisory board for several years.

Typically, Smith continued, the staff has those issues “resolved within 30 days.”

The first step is trying to reach the holder of an account, she said — with phone calls and emails the initial options.

“When that doesn’t work,” Smith explained, “we send out a nice little letter to the property owner.” That correspondence cautions the account holder that the Tax Collector’s Office will erect a “lovely sign” on the grounds of the property, making it clear to passersby that the owner is delinquent in turning over TDT revenue.

“The thought of that beautiful flyer,” Smith said, usually prompts the person to pay.

“Filing a warrant is the last resort,” she noted. Such action was not necessary during the 2022 fiscal year, she said.

Only two outstanding warrants remained from previous years, Smith continued; both involve management companies that no longer have a presence in the county. Together, she added, they owe a bit less than $4,000.

Further, she explained that the staff works hard to uncover new TDT accounts whose principals have not registered with the Tax Collector’s Office. When a property owner has been identified, Smith said, that person is assessed back taxes, along with any interest and penalties.

“We try our best to educate these folks to come into compliance,” she told the TDC members.

The written Tax Collector’s Office report on the 2022 fiscal year also notes, “Leads are generated through the collection of other taxes such as property tax and business tax. Whenever an owner of rental property registers for a business tax or inquires about a property tax bill, this is used as an opportunity to determine if they are liable for tourist tax.”

Further, the report explains, “Internet sites generate many leads …” However, it can be “very time consuming” for staff to identify the owner and location of the property. “In working these referrals, findings have shown that the majority of the accounts identified were already paying the tax or did not owe the tax. Reasons for not owing the tax include being located in another county, renting for longer than six months, or no longer renting.”

Additionally, the report says, referrals from the public are “[a]nother important resource. These referrals typically come from owners who are already paying the tax but suspect a neighbor who is not doing so. Twenty-three referrals were received in 2022. The Tax Tipline generated sixteen referrals,” while four came via phone calls, the report notes. “Additionally, two were received from the [Sarasota County] Property Appraiser’s Office and one by mail.”

During her remarks, Smith did take the opportunity to recognize Kenni Gregg, the other “exceptional staff member” in the Tax Collector’s Office who works on TDT collections.

Schimmel remains vice chair

During the first part of the Feb. 9 TDC meeting, Chair Detert announced that long-time member Norman Schimmel “has been our vice chair for quite a while and would like to continue serving if that’s all right with everybody.”

No one objected, so Schimmel was re-elected vice chair. He thanked his colleagues for their support.

“You do a good job and you certainly know more than most of us here, speaking on behalf of myself, mostly,” Detert told him.

Penny Gold, a Longboat Key town commissioner, won the appointment as an alternative to Schimmel.