Internet-based accommodations service concedes to provisions Tax Collector’s Office sought in regard to collection of unpaid revenue and auditing measures
It was slightly more than three years ago when Sarasota County Tax Collector Barbara Ford-Coates first talked at length with county Tourist Development Council (TDC) members about her staff’s efforts to track down residents renting properties through the internet-based firm Airbnb. Some of them were not paying the 5% Tourist Development Tax (TDT), she pointed out in February 2014.
Shortly thereafter, Chief Deputy Tax Collector Liz Klaber told The Sarasota News Leader she nonetheless did credit the company for including wording on its website that encouraged hosts to pay any applicable local taxes.
Then in March 2016, as Ford-Coates made her annual report on TDT collections to the Tourist Development Council members, she talked of her expectation that her office was “just moments away from signing an agreement” with Airbnb.
Skip forward a year, and on March 23, Ford-Coates acknowledged to the TDC members during hear latest annual report that inking that contract with Airbnb had proven far more elusive than she had anticipated.
In interviews with the News Leader last year, Ford-Coates pointed to frustrations regarding her office’s negotiations with Airbnb that would have prevented her staff from pursuing TDT collections hosts should have paid in past years, as well as the company’s continuing insistence on anonymity of hosts, even though state law makes it clear that any local government offices that collect bed taxes have to keep the renters’ information confidential.
If all went as planned, though, she continued during the March 23 TDC meeting, the contract finally would become reality on April 3. During its regular session that day in Venice, the County Commission was scheduled to vote on it, she said, with her office as well as the Office of the Sarasota County Clerk and County Comptroller having reviewed the document.
On April 3, the commission unanimously did approve the contract finalized through the work of Deputy County Attorney Kathleen Schneider — as Ford-Coates and Commissioner Charles Hines noted during that March 23 TDC meeting. No board member offered a comment.
A memo provided by county Office of Financial Management staff to the County Commission pointed out, “Over the last several months, Airbnb has conceded its request for confidentiality requirements and has agreed to provisions that do not waive the County’s right to seek property owner information, auditing data and past revenues.”
A clause in the contract says, “If requested by the Tax Collector or the Clerk [of court], Airbnb agrees to provide transaction data based on anonymous reservation IDs or other type of transaction ID maintained by Airbnb in its ordinary course of business. Except as otherwise agreed herein,” the contract continues, “Airbnb shall not be required to produce any personally identifiable information relating to any Host or Guest or relating to any Booking Transaction in connection with an audit … until an audit of Airbnb on behalf of the County has been exhausted with the matter unresolved.”
Ford-Coates also noted during the recent TDC meeting that the agreement approved this week is expected to bring the county about $355,000 in new TDT revenue this fiscal year. County commissioners in 2016 especially talked of their desire to see the contract signed before the community hosts tens of thousands of international visitors for the World Rowing Championships this fall.
A county news release issued April 3 pointed out that the collections on Airbnb rentals will begin May 1.
“We are pleased to have reached this agreement in collaboration with Tax Collector Barbara Ford-Coates,” said Sarasota County Administrator Tom Harmer in the release. Referring to the TDT, he added, “This is an important revenue source the county uses to promote tourism and encourage economic growth for the benefit of our residents.”
Yet another urgency in securing those “bed tax” payments has been the county’s plan to use TDT revenue to back a bond to help pay for a Spring Training complex for the Atlanta Braves in the West Villages community near Venice and North Port. The County Commission on April 3 also approved holding a May 9 public hearing on a proposed revision of the TDT allocations to make the funding possible. That vote — like the one on the Airbnb contract — was part of the board’s Consent Agenda of routine business items.
Speaking of the TDT contract, Ford-Coates noted in the county news release, “This agreement levels the playing field for all short-term rentals in Sarasota County … ”
The workings of Airbnb
The typical Sarasota County Airbnb host earns $7,000 in annual supplemental income from sharing his or her home, the county news release points out. “Airbnb hosts throughout the state often utilize this supplemental income to pay their mortgages, settle student debt or fund their own personal vacations,” the release says.
“Our 700-plus Sarasota County hosts want to pay their fair share in taxes, and we want to help,” said Tom Martinelli, Airbnb Florida policy director, in the release. “This deal will bring valuable new revenue to the county while making the tax remittance process seamless and easy for our host community.”
Airbnb has entered into voluntary collection agreements with the Florida Department of Revenue, which collects for 22 counties that do not collect their own tax, as well as individual agreements with Pinellas, Hillsborough, Polk and Orange counties, the release adds.
The memo provided to the County Commission in advance of the April 3 meeting explains that, based in San Francisco, Airbnb contracts with hosts for use of its online platform. It charges each guest a 9% service fee, while a host pays a 3% fee for use of the platform. “Both service fees are separately stated to the Guest and Host apart from the rental cost of the property,” the memo adds. “Once a transaction has been approved between the Host and the Guest, Airbnb collects the rent and service fees from the Guest and retains them until 24 hours after the Guest checks [into] the property. At that time the rent minus the service fees are paid to the Host,” it notes. “Airbnb retains both the Guest and Host service fees.”