Online rentals continue to impact local bed-tax collection

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By Rachel Brown Hackney, SarasotaNewsLeader.com

In the 2020 fiscal year, online accommodations rental platforms such as Airbnb and HomeAway continued to increase their share of business in Sarasota County, Chief Deputy Sarasota County Tax Collector Sherri Smith has reported to members of the county’s Tourist Development Council.

Since May 2017, the county has been receiving a monthly check from Airbnb for the Tourist Development Tax — or “bed tax” — revenue that Airbnb hosts collect in the county, she said. By the end of the 2017 fiscal year, the Airbnb total was $310,755.25. The figure climbed to $1,105,374.61 in the 2018 fiscal year; $1,664,256.33 in the 2019 fiscal year; and $1,792,348.50 in the 2020 fiscal year.

Each fiscal year begins on Oct. 1.

The 5% Tourist Development Tax (TDT) is charged on rentals of accommodations for six months or less time.

Through Dec. 31, Smith noted, Airbnb’s TDT collections added up to $960,971.71.

Thus, from May 2017 through December 2020, Smith said, the county “almost effortlessly” has brought in more than $5.83 million in revenue from Airbnb.

Thanks to the Sarasota County Commission’s support and the assistance of the Office of the County Attorney, she continued, HomeAway and TripAdvisor, “and all their subsidiaries,” began remitting TDT collections to the Tax Collector’s Office in April 2019. Since then, she added, the county has received more than $1.97 million from those other companies. Smith paused to stress, “That’s amazing.”

A graphic in the Tax Collector’s Office’s published report on the 2020 fiscal year notes that revenue from the online platforms has increased 59.12% over the past two years. The only other type of accommodation with an increase during the same period was “Campsites,” which saw a 1.62% uptick, the report noted.

In comparison, the revenue generated by condominiums fell 16.09%, while the collections from hotels and motels dropped 15.66%, a chart showed. 

Smith also pointed out that, unlike Airbnb, the other online platforms do not give the Tax Collector’s Office staff permission to share their individual totals. Thus, she noted, each monthly TDT report combines all the online accommodations collections into one listing.

When Commissioner Nancy Detert, who chairs the council, asked whether Vrbo.com is among online platforms turning over bed tax revenue to the Tax Collector’s Office, Smith assured Detert that it is, as it is a subsidiary of one of the other companies.

“Vrbo is now getting very popular in our area,” Detert responded.

TDC member Bharat Patel asked Smith whether the county is missing out on revenue from other online accommodations services.

“Not to my knowledge,” Smith replied. Because of the way the Office of the County Attorney structured the agreements, Smith added, whenever one of the platforms adds a new subsidiary, the Tax Collector’s Office gets revenue from that one, as well.
The staff has a way to keep a check on new subsidiaries, Detert indicated.

Condominiums comprise the largest portion of TDT accounts, Smith noted: 72.37%, followed by houses, at 19.8%.

Detert noted that the latest trend she has observed has been one in which people construct “little ‘McMansions,’” which essentially are “mini hotels,” but they are in residential neighborhoods. 
The Florida Association of Counties is working to try to persuade Florida legislators to approve regulations to deal with that trend, Detert said. While the county wants to collect the bed tax from the owners of such accommodations, she continued, “We really don’t want them in the middle of residential neighborhoods.”

The Tax Collector’s Office staff works to ensure that the owners of those big houses are paying the bed tax, Smith said.

Other details of the annual report

Among other facets of the Tax Collector’s Office’s annual TDT report, Smith noted the negative impacts of the novel coronavirus on collections.

The TDT revenue total for the 2020 fiscal year was $21,005,534.64, which was a drop of 10.04% from the fiscal year 2019 figure of $23,349,088.39, Smith said.

The 2020 fiscal year “started out strong,” she noted, with collections up 18.75% in October 2019, compared to the total for October 2018; a 17.93% month-over-month climb for January and a 22.78% increase in February 2020, compared to the total for February 2019.

“Unfortunately,” she continued, “March through June all saw significant decreases.

“Typically, March is our highest collection period.” However, the revenue reported in March 2020 represented a 37.15% decline, compared to the figure for March 2019. The April drop was far bigger, she noted: 87.44%.

“It was not until July of 2020 that we started seeing improvements,” she said. “In August, we were very pleased to see a 14.61% increase,” Smith added, and in September 2020, the revenue was up 31.26%, compared to the figure for September 2019.

Then Smith reported that, as of Dec. 31, 2020, the Tax Collector’s Office had 7,885 accounts, which was down 3.28% from the number at the end of 2019.

For the fourth year in a row, Smith continued, the hotel/motel category generated the greatest amount of bed tax revenue — 41.68%. That was followed by condominiums, at 33.96%.

Prior to the 2016 fiscal year, she noted, condominiums generated the largest amount of revenue, but each year since then, “the gap narrowed.”

Altogether, she pointed out, hotels, motels and condominiums produced 75.64% of the revenue.

Smith also noted that, traditionally, Siesta Key and the City of Sarasota are the locations with the highest percentages of bed tax revenue collections each fiscal year. As of Dec. 31, she said, the city of Sarasota was in the lead, with 27.75% of the collections, “followed ever so closely by Siesta Key at 27.70%.”

Entities that collect the tax in the unincorporated parts of the county were in third, with 15.94% of the total, she added.

John Morton
Author: John Morton

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