Airbnb Sues PB County Over “Unconstitutional” Bed Tax Requirement
Airbnb executives and Palm Beach County leaders are clashing yet again.The popular vacation rental hosting platform just filed another lawsuit against the county and tax collector Anne Gannon.The suit, filed in the 15th Judicial Circuit Court on Monday, claims that the county’s new vacation rental ordinance violates the Local Option Tourist Development Act and the Florida Constitution. It also says the ordinance’s “unconstitutional and unlawful provisions” will cause Airbnb to “suffer irreparable harm, the extent of which is incalculable.”Palm Beach County’s revised rules for vacation rentals were approved on June 18.Airbnb is disputing a requirement that it provide bed tax information to hosts and collect a valid bed tax account number from them, before listing the property online.The ordinance also requires Airbnb to collect bed taxes and remit them to the vacation rental host, who then gives the bed taxes to the tax collector’s office. The lawsuit states, “Such [bed tax] obligations improperly transform Hosting Platforms and Booking Services into de facto enforcement arms of the Tax Collector.”An Airbnb spokesperson adds, “We are tired of fighting with Tax Collector [Anne] Gannon when we could be supporting her as we do for all of the surrounding counties. We will continue to try and work with the County to find a solution that allows Airbnb to help facilitate tax collection.”Airbnb currently has an agreement with Florida’s revenue department to collect and remit state sales tax. It also has agreements with Broward, Miami-Dade, and 38 other counties to collect and remit bed taxes on behalf of hosts.According to an email from Gannon, “We are constitutional officers and under our oath of office we are obligated to collect taxes under the contract we have with the county. [Airbnb] only want(s) to remit a bulk payment monthly.”The Local Option Act gives counties the ability to impose bed taxes on a “dealer” for vacation rentals or leases. Airbnb believes it should not be subject to those requirements because it is a platform for dealers, rather than an actual dealer of short-term vacation rentals.Five years ago, Gannon sued Airbnb, as well as three other companies, for failing to register dealers and collect or remit bed taxes. Last January, Circuit Judge James Nutt ruled in favor of Airbnb and the other companies. He wrote at the time, “In short, dealers are limited to those engaged in the business of renting, not the business of servicing those in the business of renting.[Airbnb’s and others’] extensive involvement remains confined to the latter.”Airbnb and HomeAway sued Palm Beach County last November, after commissioners approved the first version of vacation rental rules. The separate lawsuits, which have since been combined, state that the regulations violate state and federal law, and that requiring companies to comply with the county’s rules would violate customers’ rights. The case is currently in federal court.