They say that only two things in life are certain, “Death and Taxes” — try to cheat either one and they’ll catch up eventually.
The new-fangled online “sharing economy” — built on transportation, housing and just about any targeted industry you can shake an app at, has also led to hiccups in local government tax collection efforts, too.
After years of trying to get homeowners who lease out rooms in their homes through Airbnb to fill out the right forms and collect transient occupancy taxes, SLO County has reached an agreement directly with the company.
County Supervisors announced Aug. 15 that Airbnb, or as the County refers to it, the “popular online lodging rental platform,” will collect TOT and and related assessments in the unincorporated areas of SLO County.
Since the online service does not consider itself to actually be in the “lodging” bussiness, the agreement was strictly voluntary and took more than a year of negotiations to work out.
County Auditor-Controller-Treasurer-Tax Collector, Jim Erb said in a news release that the change would help the hotel sector.
“This agreement,” Erb said, “will help ensure that everyone is playing by the same rules and paying the same taxes because lodging operators renting rooms and properties through Airbnb will be paying the same taxes that other operators are required to pay. Secondly, it will make it easier for those operators to remit the taxes, because Airbnb will build the tax into the total price paid for each rental, and transmit the funds on their behalf, along with the required reporting, directly to the County.”
In his staff report, Erb reported that there are currently 1,323 licensed lodging businesses operating in the unincorporated areas of the county. Of those, a whopping 1,139 are vacation rentals.
In the last fiscal year, those businesses remitted over $9.4 million in TOT to the County General Fund. However, while Erb’s office is responsible for monitoring all such rentals in the County and issuing licenses, they haven’t been able to locate all of the folks who sign up to lease without first jumping though government hoops they may not even know are there. Consequently, TOT numbers aren’t as high as they should be.
With the online service now tacking an additional 12% onto customer bills in affected areas of the county, everyone comes away happier, except perhaps for the visitors.
The itemized billing breaks down as the 9% TOT (per night depending on the rate), 1% for the County Tourism Marketing District and another 2% to cover the County Tourism Business Improvement District (CTBID) assessments. The CTBID uses its monies to promote tourism specifically in the unincorporated areas and the TMD, which includes fees paid by motels within cities, is used to promote the county as a whole.
For scofflaws who might be thinking of continuing to evade taxes by listing their extra rooms through other similar websites, the County has contracted with web service “Host Compliance” to scour the Internet and cross references advertised locations against County records.
– By Camas Frank