For fifth fiscal year in a row, hotels and motels generated biggest percentage of county ‘bed tax’ revenue, annual report shows

March 2021 collections highest ever for a single month

This pie chart in the 2021 fiscal year annual report shows the breakdown of accounts by type. Image courtesy Tax Collector Barbara Ford-Coates

In the 2021 fiscal year, for the fifth year in a row, hotels and motels were the leading source of Sarasota County’s Tourist Development Tax — or, “bed tax” — collections, Sherri Smith, chief deputy Sarasota County tax collector, has reported to the county’s Tourist Development Council.

Hotels and motels generated 39.3% of the record-setting total of $31,032,649.21, Smith pointed out during a March 10 presentation.

“We welcomed a new hotel on the south side of University Parkway in December of 2020 and another new hotel in Venice [in] December of 2021,” she said.

The total amount of bed tax revenue for the 2021 fiscal year, she also emphasized, was “the highest collection we have ever seen.” The figure marked a 47.74% increase, compared to the amount turned over to the Tax Collector’s Office in the 2020 fiscal year, Smith said.

In March 2021, she continued, the Tax Collector’s Office marked the highest amount ever for a single month in bed tax revenue: $4.58 million. That was followed by April 2021 at $3.51 million, and July 2021, with slightly more than $3.32 million, according to the annual Tourist Development Tax (TDT) report for the 2021 fiscal year.

Moreover, Smith told the advisory board members, April’s revenue total represented the largest month-over-month hike from the 2020 fiscal year — “an incredible 1,151.27%.”

Smith did remind the Tourist Development Council (TDC) members about the effects of the COVID-19 pandemic on tourism in April and May 2020, especially.

This is a comparison of the Tourist Development Tax revenue by account. Image courtesy Tax Collector Barbara Ford-Coates

Through December 31, 2021, Smith noted, the Tax Collector’s Office had 7,427 TDT accounts, which was down 5.81%, compared to the figure for the 2020 fiscal year.

Of those accounts, she said, condominiums made up the highest portion: 72.18%. Houses were in second place, at 20.33%, she said.

Altogether, she added, hotels, motels and condominiums generated 71.97% of the bed tax revenue in the county during the 2021 fiscal year.

Online platforms — such as Airbnb — accounted for 20.63% of the money, Smith said. Houses generated 4.82% of the revenue, followed by apartments at 2.13%, campsites at 0.34%; and manufactured homes at 0.11%.

The 5% Tourist Development Tax is charged on rentals of accommodations for six months or less time in the county.

Traditionally, Smith further explained, accommodations in the city of Sarasota and on Siesta Key account for the highest amount of the bed tax revenue. As of Dec. 31, 2021, she said, Siesta Key had the top spot for the 2021 fiscal year, with 26.7% of the collections, “followed closely by the city of Sarasota, at 26.19%.”

Longboat Key contributed 8.02% of the total, she continued, followed by Venice at 4.21% and North Port at 0.63%.

When TDC Vice Chair Norman Schimmel asked Smith whether she had any theories about why the online platforms’ percentage of the funds had increased so much, Smith replied that she would welcome the thoughts of the advisory council members.

Still, she continued, “I believe Virginia [Haley, president of the county’s tourism office, Visit Sarasota County] and her team do such an outstanding job bringing people … to our county.”

Additionally, Smith said, she knew from other Tax Collector Office statistics that “we have seen such growth in our county. … We’re issuing a lot of new driver’s licenses,” along with new license plates.

Smith then told the council members, “I believe a lot of those folks come down before they make the decision [to move to Sarasota County].”

Further, she said — though she acknowledged, “I’m just guessing” — with living expenses having risen in recent months, more people likely are renting out homes that they do not use year-round, to earn extra income.

This graph compares the tax collections by month over the past three fiscal years. Image courtesy Tax Collector Barbara Ford-Coates

TDC member Penelope Gold, a Longboat Key town commissioner, also noted that, during the height of the pandemic, “People were afraid to stay in hotels and be around crowds.”

“Makes perfect sense,” Smith responded.

Another TDC member, Steve Cavanaugh of Tropical Sands Accommodations on Siesta Key, pointed out, “One of the things that we’ve seen out on Siesta Key, specifically, is a lot of the ‘mom and pop’ setups” have been renting units through the online platforms.

When Cavanaugh asked whether the Tax Collector’s Office has any details about where the dwellings rented through the online companies are located in the county, Smith told him that the staff does not.

“There was legislation — unfortunately, it did not pass,” which would have provided property owners’ details to tax collectors’ offices, Smith replied.

When Cavanaugh then asked whether, perhaps, a breakdown of the number of dwellings by county zip code is available, Smith responded that not even that information is released by the companies.

However, she said, the Tax Collector’s Office staff works closely with the municipalities in the county in regard to business taxes. Many of cities, she explained, will not issue a business license to a short-term rental business until the owner proves, through provision of documentation, that he or she has registered with Sarasota County to pay its business tax. “So we can track them based on that,” Smith said.

A history of growth in online rental platform revenue

This chart shows the amounts of revenue collected by month over the past three fiscal years. Image courtesy Tax Collector Barbara Ford-Coates

Providing more details about the online platforms’ bed tax collections, Smith pointed out that, in April 2017, the county and Airbnb finally signed an agreement calling for the company to turn over its hosts’ revenue to Tax Collector Barbara Ford-Coates staff.

The first money came into the office in May 2017, Smith said. That amount was $310,000, she added.

In the 2018 fiscal year, she continued, the total was $1.1 million; in 2019, $1.6 million; and in FY 2020, it was $1.7 million.

For the 2021 fiscal year, she pointed out, “Airbnb collections were over $3.9 million.”

Through February of this year, Smith told the advisory board members, Airbnb had turned over more than $10.3 million to the Tax Collector’s Office.

This is a website banner on the Airbnb homepage in 2021. Image from the website

In April 2019, she continued, thanks to the efforts of the Office of the County Attorney TripAdvisor and HomeAway, as well as all of their subsidiaries, also began remitting bed tax money to the Tax Collector’s Office. Unlike Airbnb, however, she said, those companies will not provide the staff the number of individual renters.

Nonetheless, Smith noted, the companies had turned over $5.1 million since the agreements went into effect about three years ago.

County Commissioner Nancy Detert, who chairs the Tourist Development Council, pointed out, “You had this kind of money — millions — under the radar, competing with our hotels,” not paying the 5% bed. “We … insisted that [the online platforms] pay their fair share, same as a hotel would.”

Detert added, “Airbnb was very cooperative.”

Smith also noted that the Tax Collector’s Office staff members keep an eye out for events they can attend, where they can educate property owners about the need to collect the Tourist Development Tax if they are renting dwellings to visitors.

Delinquent tax payments

In regard to delinquent accounts: Smith explained that each month, when an account does not turn over revenue to the Tax Collector’s Office, “Our friendly yet very persistent enforcement team” contacts the person associated with the account to ask about the situation.

Therefore, she continued, delinquent account problems are “usually resolved within 30 days.”

The Tax Collector’s Office staff calls or emails an account holder at the outset in those situations, Smith noted. The next step is mailing a letter. “We let the property owner know that we have a beautiful flyer that we would put on their rental income property,” pointing to the delinquency, she added. “Usually, that resolves the issue very quickly.”

When an account still is not paid, Smith continued, a warrant is a last resort. Only one of those was filed in the 2021 fiscal year, she said, compared to two for the 2020 fiscal year. Staff still is at work on the latter, she explained. Both cases involve management companies that no longer are in business, Smith pointed out. Together, they owe a little less than $4,000. “But we are still working it.”

Finally, she said, through February, TDT collections are $4.39 million higher, compared to the amount for the same period of the 2021 fiscal year. “We are on a roll here in Sarasota.”

This portion of the 2021 fiscal year annual report shows future plans for the Tax Collectors Office in regard to the Tourist Development Tax. Image courtesy Tax Collector Barbara Ford-Coates

Smith did take the opportunity to name the two primary individuals in the office who handle all of the bed tax issues and funds: Kenni Gregg and Lisa Ferris.

She also recognized Angela Nicoloso, director of processing and tax services at the Tax Collectors Office, who had accompanied her to the meeting.