Tourism & Cruises

Airbnb doesn’t have to pay tourism tax in Florida, judge says. That’s the host’s job

A lawsuit against Airbnb that was spearheaded by Manatee County Tax Collector Ken Burton Jr. has been dismissed by a local judge, citing an identical case in Palm Beach County.

Both cases stemmed from a desire to force Airbnb — an online short-term rental company that allows homeowners to market their homes or apartments as hotel alternatives — to collect tourism taxes and pay them to the county, but judges found that Airbnb could not be held liable for those taxes because the service is only a “conduit” for hosts who make their homes available to renters.

Palm Beach’s tax collector filed a lawsuit in January 2014. In a ruling last January, Judge James Nutt opined that while Airbnb’s “services are comprehensive,” “they do not own the properties being rented.” Because Airbnb, along with other platforms that manage short-term rentals, do not control the property, they don’t exercise taxable privilege.

As a result, these short-term rental companies cannot be held accountable as “dealers,” according to Nutt.

On Oct. 22, 12th Judicial Circuit Court Judge Edward Nicholas granted Airbnb’s request to dismiss Burton’s lawsuit along the same lines. If Florida does want to identify Airbnb as a “dealer,” then the Legislature should make that call, he said.

“The defendant (Airbnb) here is simply a conduit through which a vacationer can book a reservation and stay at a homeowner’s property,” Nicholas wrote. “The defendant is not in the business of renting, leasing or granting licenses to use transient accommodations and does not grant possessory or use rights in the properties, as contemplated by the Tourist Development Tax enabling statute or Manatee County’s ordinance.”

“Ultimately, it is the property owner who ‘collects’ the rent and is therefore, obligated to remit the TDT,” he added.

The Tax Collector’s Office has maintained support of its lawsuit in recent months. Earlier this year, the Board of County Commissioners considered sidestepping Burton’s legal action by putting the Florida Department of Revenue in charge of collecting Manatee’s bed taxes instead of the tax collector.

In March, the tax collector’s employees defended the system they have in place. Using a combination of software and field agents, the Tax Collector’s Office is able to track Airbnb hosts and other short-term rental owners who have not yet registered to remit the 5 percent bed tax that applies to rentals of 6 months or less. There’s even a hotline residents can use to anonymously report someone they believe is using their property as a vacation rental without paying tourism taxes to the county.

On Monday, the Tax Collector’s Office declined an opportunity to comment on the dismissal.

“Until we have ample time to review the proceedings, we cannot provide a time frame for a response,” an employee said via email.

Airbnb, on the other hand, was thrilled with the outcome of the lawsuit, and said it looked forward to working with Burton’s staff to implement a voluntary collection of bed taxes. The company has a similar agreement in place with the Florida Department of Revenue that allows it collect state sales tax on rental bookings throughout all of Florida.

“We are pleased that Judge Nicholas granted our Motion for Dismissal based on the ruling in Palm Beach County earlier this year on the same topic and we remain willing to work with Manatee County on an agreement to voluntarily collect bed taxes on behalf of our hosts, as we do for 41 counties across Florida, including Hillsborough and Sarasota,” Airbnb said in a statement provided to the Bradenton Herald.

The Tax Collector’s Office previously indicated that it would not relinquish the right to collect bed taxes to a private entity. Commissioners were skeptical of the cost-benefit ratio associated with having to pay for software and manpower to track short-term rental hosts who have not paid bed taxes when Airbnb has offered to do it automatically.

In a release, Airbnb also touted the economic impact the platform has brought to Manatee County. In 2018, 49,000 guests used Airbnb to find rental housing in the area, earning hosts a combined $12.4 million, the company said.

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Ryan Callihan is the Bradenton Herald’s County Reporter, covering local government and politics. On the weekends, he also covers breaking news. Ryan is a graduate of USF St. Petersburg.
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