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Hotel group challenges validity of state’s Airbnb agreement

‘Airbnb negotiated its secretive agreement with… zero transparency.’

The state’s agreements with Airbnb and HomeAway that have the companies collect sales taxes from their client vacation rental home operators and remit them to the Florida Department of Revenue are being challenged by the Asian American Hotel Owners Association.

The hotel association filed a petition with the Florida Division of Administrative Hearings Tuesday charging that 2015 agreement and HomeAway’s 2018 pact were negotiated in secret, outside of usual rule making protocol, do not provide sufficient accountability, and should be voided.

Airbnb was the first internet vacation rental home marketing company to begin working with Florida to collect taxes on behalf of the state from thousands of privately owned properties being operated as individual short-term rentals. HomeAway and its affiliated companies reached a similar pact last year.

Airbnb has similar agreements with 40 counties and municipalities. The hotel association asserted similar complaints about those agreements in a news release, though the official petition deals only with the state agreement.

The company argues that its efforts have coordinated delivery of taxes from numerous operators that might otherwise have been overlooked, and brought in $62.5 million in sales taxes just last year, nearly doubling receipts from the year before. The company also has maintained that its tax agreements have been supported by many hoteliers who like that someone is getting vacation rental owners to pay taxes, as hotels must do.

Airbnb also is not the only vacation rental home marketing company signing such tax collection agreements. A handful of smaller companies also have signed or discussed such agreements.

The hotel association contends that the Airbnb and HomeAway agreements keep much information secret, even from the governments receiving the taxes, making verification, reviews and audits difficult or impossible. The group, which counts 1,100 Florida hoteliers among its members, also contends that the agreements are unfair to traditional hotels, which pay taxes under rigorous rules.

“Airbnb negotiated its secretive agreement with the state of Florida behind closed doors with no opportunity for public input and zero transparency,” Rachel Humphrey, AAHOA interim president and chief executive officer, stated in a news release. “While traditional lodging providers adhere to strict tax collection and remittance laws, the VCA [voluntary collection agreement] essentially allows Airbnb to operate under their own honor system with no way to verify whether they are collecting and remitting all applicable taxes. Airbnb and other short-term rentals should be held to the same standard as law-abiding lodging businesses in Florida.”

Airbnb spokesman Ben Breit called the challenge “a publicity stunt.”

“We are quite surprised that the Washington D.C. hotel lobby would impugn the integrity of the Florida Department of Revenue and its authority over the tax process,” Breit said. “Airbnb is a leader in this space and worked collaboratively with DOR to collect and remit $62.5 million in state sales revenue in 2018. In this case, attacking a well-respected state agency is nothing more than a publicity stunt.”

Airbnb’s agreements already are in some jeopardy because of the international company’s policies dealing with listings in Israel’s West Bank territories. In November the company announced it no longer would accept listings of vacation rental homes owned by Jewish Israelis in the West Bank, leading to a torrent of controversy that resulted, in January, with Florida blacklisting the company as “scrutinized” for allegedly boycotting Israel.

The company has vehemently denied it is boycotting Israel or doing anything discriminatory, arguing that while it has a robust business in and with Israel, its West Bank policy is a separate matter.

Nonetheless, under a state law approved last year after being pushed through by Republican state Rep. Randy Fine of Brevard County, one of the ramifications of such a listing is that Airbnb might no longer be allowed to do business with Florida or local governments. If so, the state could seek to cancel the agreement on that ground.

Written By

Scott Powers is an Orlando-based political journalist with 30+ years’ experience, mostly at newspapers such as the Orlando Sentinel and the Columbus Dispatch. He covers local, state and federal politics and space news across much of Central Florida. His career earned numerous journalism awards for stories ranging from the Space Shuttle Columbia disaster to presidential elections to misplaced nuclear waste. He and his wife Connie have three grown children. Besides them, he’s into mystery and suspense books and movies, rock, blues, basketball, baseball, writing unpublished novels, and being amused. Email him at scott@floridapolitics.com.

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