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It is pure sophistry for the big hotel lobby to cry about a perceived tax advantage that a property owner has when he wants to rent a basement room out for a few days at a time. They aren't the same type of business and I'm not sure why it should be necessary to force a homeowner to pay occupancy taxes on top of the property taxes they already pay. Judging by the occupancy rates in the Charleston market for the last few years, AirBnB doesn't seem to have made much of an impact on their business, so I'm not sure their claims aren't simply a ruse.
The reality is that it will cost significant money and resources to police this kind of quasi-black market. Once people figure out there are other sharing-economy technologies they can use to get these little rentals, they will jump ship from Air BnB. Take a look at the craigslist ads under housing, and you'll see my point.
There is one thing that big business and state governments hate more than anything: technology that subverts their revenues. Hence the outcry.
It is pure sophistry for the big hotel lobby to cry about a perceived tax advantage that a property owner has when he wants to rent a basement room out for a few days at a time. They aren't the same type of business and I'm not sure why it should be necessary to force a homeowner to pay occupancy taxes on top of the property taxes they already pay. Judging by the occupancy rates in the Charleston market for the last few years, AirBnB doesn't seem to have made much of an impact on their business, so I'm not sure their claims aren't simply a ruse.
The reality is that it will cost significant money and resources to police this kind of quasi-black market. Once people figure out there are other sharing-economy technologies they can use to get these little rentals, they will jump ship from Air BnB. Take a look at the craigslist ads under housing, and you'll see my point.
There is one thing that big business and state governments hate more than anything: technology that subverts their revenues. Hence the outcry.
I've stayed in a number of Airbnb properties that were way more than someone just renting out the basement for a few days. Some of the properties truly are run like hotels. My experiences include getting a keycard from a front desk agent, airport pickup/dropoff, concierge service, etc. Some people own enough properties to make a living via Airbnb, I actually stayed in one such owner's property in New Orleans.
Airbnb and Craiglist are not the same thing at all.
Taxes should be kept at a reasonable rate and applied fairly. Closing this loophole seems like ending a tax dodge, not creating a new tax.
I would think they would already be paying income taxes on the rental & think making an adjustment to property taxes in line with the fact that these are not entirely residential properties.
That said someone that is running their home as a true B&B or Inn should have meet the criteria of other businesses. And the parking regulations...
The state visited this issue in 2014 via SB 437 when it sought to protect homeowners from paying a non-resident percentage on vacation rental properties.
In 9 months they seemed to have taken a 180 degree turn.
I agree that an inn or a B&B should pay the occupancy tax. But the homeowner who rents his house for less than 72 days, as proscribed by SB 437, shouldn't be forced to pay anything beyond the income and property tax they already pay.
The state visited this issue in 2014 via SB 437 when it sought to protect homeowners from paying a non-resident percentage on vacation rental properties.
In 9 months they seemed to have taken a 180 degree turn.
I agree that an inn or a B&B should pay the occupancy tax. But the homeowner who rents his house for less than 72 days, as proscribed by SB 437, shouldn't be forced to pay anything beyond the income and property tax they already pay.
Seems like a totally different issue. Paying non-primary resident tax rate on a property is different than paying an occupancy tax when renting out a room as a hotel alternative. Hotels pass this tax on to the guest at the time of payment, so Airbnb hosts aren't going to get walloped with a surprise tax bill come April. It'll just be part of what the guest pays the host.
This seems like a side issue, surely not one that would normally elicit much passion. You must have a vested interest in this because otherwise I don't see why it would get anyone's "blood boiling" one way or the other.
I actually have no vested interest. i just cant stand it when industry lobbyists try to impose their liabilities onto the little guy who has no money to buy representation at the state, which is what is happening here.
You said homeowners shouldn't pay occupancy taxes on top of property taxes they already pay. Don't true BnB and hotels pay occupancy tax on top of property taxes they already pay? Aren't the property taxes that hotels and true BnB pay more than primary residences?
Don't true BnB and hotels pay occupancy tax on top of property taxes they already pay? Aren't the property taxes that hotels and true BnB pay more than primary residences?
Yes the hotels pay more in business taxes. But to be fair, some hotels receive tax credits and other kinds of government largess that the homeowner doesn't receive. So is it really an even playing field?
And yes, I'm in favor of imposing occupancy taxes on the homeowners who rent a space more than 72 days a year. Their intent is to run a kind of hotel business so they should be treated as such. For the owner-occupied homes that rent for less than 72 days, I think it is unfair.
This is basically just another case of an incumbent industry flexing it's muscle. Air BnB capitulated on this issue because it is easier for them to simply pass the fees along to the tourists. Anyone who believes our tax code is severely weighted on the backs of small business owners and individuals should care about the principal of the matter. The fact that we all too often go along with this kind of arrangement is the problem.
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