Settlement with Airbnb, HomeAway reinforces Palm Beach County short-term rental tax law

Airbnb and HomeAway have made agreements with Palm Beach County that will require short-term rental hosts to obtain and use tax identification numbers. The deal settles one of several lawsuits between the online short-term rental platforms and Palm Beach County Tax Collector Anne Gannon.

Under the settlement, starting November 7, the platforms will not allow properties without tourist development tax and business tax receipt numbers to advertise on their sites.

At that time, the platforms will begin sharing information with the county on which properties are listed, and the county will check the tax numbers of those listings to make sure they’re valid. Listings with invalid tax numbers will be removed from the sites.

Short-term rentals in Palm Beach County, like hotels, are required to collect county tourist development tax (TDT) from their guests and pass the tax on to tax officials. Hosts must create a TDT account with the Palm Beach County Tax Collector's Office and obtain a local business tax receipt for each rental property. This tax generates more than $50 million annually for tourism promotion in the county.

Palm Beach County hosts must also get a Florida Vacation Rental Dwelling License, obtain a state tax certificate, and collect state taxes.

While Airbnb and HomeAway (and HomeAway affiliate Vrbo) automatically collect state taxes and some county taxes on behalf of their hosts when guests pay, they don’t collect Palm Beach County taxes.

Airbnb and HomeAway are currently involved in further lawsuits against Palm Beach County, which wants to require the platforms to collect county tax on behalf of their hosts. In the meantime, Palm Beach County hosts must complete all registrations, collect county tax from guests, and file county tourism tax returns on their own.

MyLodgeTax can help short-term rental hosts automate and simplify lodging tax compliance at the county and state level, including tax registration and filing.

Airbnb also recently came to a settlement with Miami Beach. As part of that agreement, Airbnb must include city-issued business tax receipt numbers as well as resort tax registration certificate numbers on every Miami Beach listing.

Airbnb will not be responsible for verifying whether those numbers are valid. The city will check them, and recently announced that short-term rental hosts who provide false business license numbers can be prosecuted for a criminal offense. Violating the law can be penalized with 60 days of jail time and/or a $500 fine.

For more on vacation rental lodging taxes in Florida, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.