1. Business

Airbnb rooms to be taxed across Florida starting next month

Jeff Schorr in the second floor of his historic airplane bungalow that serves as a rental apartment on Airbnb in the Kenwood neighborhood of St. Petersburg Wednesday afternoon (11/18/15). Renting on Airbnb in Florida will become more expensive next month as the popular lodging rental service plans to collect state and county taxes. Schorr's apartment is about a 500 square foot unit that is rented the majority of each month.
Published Nov. 19, 2015

Renting on Airbnb in Florida will become more expensive next month as the popular lodging rental service plans to collect state and county taxes.

Airbnb says it will start collecting sales taxes and many counties' bed taxes starting Dec. 1. In Pinellas County, an early adopter of the program, that means booking a room on Airbnb will cost an extra 12 percent.

The announcement makes Florida the fourth — and largest — state to charge taxes on Airbnb rentals. North Carolina, Rhode Island and Washington state all assess taxes, as do cities like Chicago, San Francisco and Washington, D.C.

"For me, it's not about the money," said Diane Nelson, Pinellas County's tax collector. "It's about creating a level playing field for all businesses in Pinellas County."

Bed taxes will be collected in 23 counties across Florida, mostly smaller counties that let the state Department of Revenue take care of collecting the money. They include Citrus and Pasco counties, where renters will pay taxes worth 9 percent.

Larger counties like Pinellas are working out direct arrangements with Airbnb to get access to money quicker than if it flows through the state. Hillsborough hasn't yet worked out its anticipated arrangement, county officials said.

The issue has been raised in Florida before, both by governments seeking money and rival hotels who already pay bed taxes. Last year, Palm Beach County sued Airbnb, hoping to force the company to collect taxes, according to the legal website Law360.

How much money Airbnb will raise in taxes is yet to be determined. Nelson said Pinellas County officials don't know how many rooms are listed locally on the service, much less how much revenue they are pulling in. Globally, the company is expected to post $900 million in revenue this year with a projected 3 percent cut in bookings, the Wall Street Journal reported this summer.

Tampa Bay has given the service ample business. A search of its site shows about 200 rentals available each in St. Petersburg and Clearwater and about 250 in Tampa. Prices tend to hover around $100 a night in St. Petersburg and Tampa and $200 in Clearwater.

What remains unclear, however, is just how much money Airbnb generates in Tampa Bay and throughout Florida. Government officials said they don't have access to that data and Airbnb, as a private company, doesn't open up its books.

Pinellas County, which collects its own taxes, is the first county in Florida to set up its own arrangement with the company. Renters in Pinellas will pay a 5 percent bed tax and sales taxes totalling 7 percent.

Hillsborough County officials planned to reach out Wednesday to Airbnb, said Scott McAlister, the county's tourism development tax auditor. Airbnb is talking to "several other counties" about collecting taxes, company spokesman Christopher Nulty said in an email.

Although Airbnb resisted regulation previously, the company has recently taken a more conciliatory approach with local governments across the country and vowed last week to pay its "fair share of hotel and tourist taxes."

Airbnb didn't answer questions about how taxes in other states have affected bookings, but many Tampa Bay users shrugged off concerns that higher prices would drive business away. It will cost travelers, they said, but they don't expect it will dent their bottom line.

Ginny Cleary, who rents a bedroom in her house in Old Seminole Heights, says business has been steady with a paying guest 20 nights a month. Even with taxes tacked on, she figures, she will still be less expensive than any hotel in downtown Tampa. Right now, she charges $59 a night.

Jeff Schorr, who uses the service to rent out an apartment in St. Petersburg, says he's not concerned since his chief competition — hotels — are already taxed.

Airbnb also still maintains a subtle appeal beyond price: It's the experience itself. Travelers using Airbnb to rent anything from a couch to a bedroom to a mansion tend to be more adventurous, said Danielle Ferrari, who rents a house in Seminole Heights.

"They select a place to stay not only based on the accommodations, but the host's personality as well," Ferrari said in an interview. "It's more like visiting a friend rather than the impersonal experience hotels offer."

The news was cheered by tourism officials like David Downing, executive director of Visit St. Pete-Clearwater, Pinellas County's tourism agency, which uses the bed tax to pay for ad campaigns and other efforts to attract visitors to the county. That benefits business owners like hoteliers, but it helps out Airbnb as well, he said.

"It's a tide that raises all boats," Downing said. "They've been benefiting from it without contributing to it."

Times researcher Caryn Baird contributed to this report. Contact Thad Moore at Follow @thadmoore.


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