Now that Florida has essentially blacklisted the vacation rental home marketing giant Airbnb over its business policy in Israel’s West Bank territories, the state and counties may have to cancel contracts with the company, including those that have Airbnb collecting taxes on behalf of its host property owners, state Rep. Randy Fine said Friday.
Fine, a Brevard County Republican, said there now is far more to the listing of a company as “scrutinized” over Israel boycotts than the symbolic business condemnation that Florida issued Friday morning. That is thanks to his House Bill 545, which was passed and signed into law last year. That bill, now included in Chapter 287 of the Florida Statutes, forbids the state and local governments from doing any business with such scrutinized companies, he said.
“It’s a big deal,” Fine said. “I’ve spoken with the governor’s office and the attorney general’s office. They’re aware of the provisions of the bill. Partly, we’re in unchartered terrain.”
It means the Florida Department of Revenue and at least 40 counties and municipalities, including Miami-Dade, Broward, Orange, Hillsborough, Pinellas, Osceola and Fine’s Brevard, may have to determine if they must cancel agreements with Airbnb. Those pacts have the company acting as tax collector for state sales taxes and local tourist development taxes from tens of thousands of individual property owners who list their vacation rental homes on the Airbnb internet marketing platform.
The law doesn’t directly apply to any agreements that date to before 2016. Those are grandfathered in; however, they cannot be renewed as long as long as Florida lists Airbnb as scrutinized.
The state’s agreement between Airbnb and the Department of Revenue dates to 2015 for collection of sales taxes owed by vacation rental home owners. The agreement does not have an expiration date. But it does includes a clause allowing the state to cancel the pact for any reason, with 90 days written notice after the end of the current fiscal quarter. That means that if Gov. Ron DeSantis wants to cancel it, he can do so effective July 1.
DeSantis made clear Friday that he would prefer to see Airbnb change its policy toward Israel before the state takes any more actions.The provisions in Fine’s bill may have given him far more leverage in that demand. At the same time, Florida has something to lose too.
The tax collection program has been hugely popular for many counties and the state because it means they deal with only one source for tax payments, the company, rather than thousands of property owners each filing individual tax returns. It’s also a popular program for many vacation rental home owners who list on Airbnb because they don’t have to mess with the taxes themselves; Airbnb collects them automatically, much as a store cashier collects sales taxes, and does the tax paperwork for them.
On Tuesday morning the Florida Board of Administration, which is DeSantis, Moody, and Florida Chief Financial Officer Jimmy Patronis, voted unanimously to make Airbnb the first American firm on Florida’s “anti-Boycott, Divestment and Sanctions movement” scrutinized list. That action was taken in response to Airbnb’s corporate decision, rolled out in November, to stop listing vacation rental homes owned by Jewish Israelis in the West Bank territories, while still accepting listings from Arab Israelis in the West Bank.
The company’s policy was declared, by DeSantis and others at the meeting, to be a de facto boycott against Israel, in violation of Florida law that requires the state to list, as scrutinized, any companies found to be participating in the BDS movement, which many argue has roots and backing in antisemitism.
Airbnb has repeatedly and vigorously denied it is participating in the BDS movement, or that it is being discriminatory toward Israel, contending that it still has 20,000 host properties in Israel, just not any Jewish-owned properties on the West Bank. After the Florida board listed Airbnb as scrutinized on Friday, the company issued a statement that read, in part, “We unequivocally reject and oppose the BDS movement and are disappointed by today’s vote.”
The official effect of Florida’s listing is to ban any state investments in scrutinized companies. With Airbnb that was widely seen as a symbolic sanction, because the company is privately held, so the state can’t invest in it anyway. That status could be changing soon, as Airbnb reportedly announced it may be heading toward an initial public offering this year.
Fine’s bill, now law, adds the new impact: no Florida agency or local government can do business with Airbnb, and those already doing business, including through the tax collection contracts signed since 2016, must each determine if thy need to terminate the deals. The law also would make Airbnb ineligible to enter any more such agreements or contracts in Florida, a blow to its goal of expanding its list of partner counties and cities.
Airbnb referred inquires about the law to state officials Friday afternoon.
“If Airbnb wants to blow up their business, that’s their prerogative. But we have laws and they have to be followed,” Fine said. “Look, the investment side is symbolic because they don’t have any securities to invest in. But the law was very clear that you can’t do business with them. And there’s no grace period.”
The law reads, in part: “Any contract with an agency or local governmental entity for goods or services of any amount entered into or renewed on or after July 1, 2018, must contain a provision that allows for the termination of such contract at the option of the awarding body if the company is found to have been placed on the Scrutinized Companies that Boycott Israel List or is engaged in a boycott of Israel.”
Just Monday, Airbnb announced its collection of taxes for Florida and local governments nearly doubled in 2018 to $89.5 million. That included $62.5 million in sales tax sent to the Florida Department of Revenue in 2018, up from $33 million in 2017. The company reported collecting a combined $27 million in local tourist development taxes, also known as bed taxes, in 2018. That’s up from $12.7 million the previous year.