Manatee tax collector sues Airbnb for becoming 'enriched' at taxpayer expense

Airbnb reported Thursday that Florida vacation rental hosts earned a combined $450 million in supplemental income and that within the year welcomed 2.7 million guests to the state.
Airbnb reported Thursday that Florida vacation rental hosts earned a combined $450 million in supplemental income and that within the year welcomed 2.7 million guests to the state. AP

Manatee County Tax Collector Ken Burton Jr. is suing Airbnb, an online market for short-term home rentals, claiming that the company has not been properly collecting bed taxes and delivering them to the county.

In the lawsuit filed Friday, Burton claims Airbnb has "failed to register with (Burton Jr.) or Manatee County as a dealer of transient accommodations, and have failed to collect and/or remit (bed taxes) due to Manatee County."

The company has offered since early 2016 to collect these taxes on behalf of Airbnb hosts, but Burton and his office have declined several times, fearing they would relinquish some control of their operations to a private company.

Starting in 2015, Airbnb started offering contract agreements with Florida counties, where the home-rental company would collect the 5 percent bed taxes and send them to the state on behalf of the hosts. These taxes, also known as tourist development taxes, help fund public tourism-related projects in Manatee County.

With an agreement with the Florida Department of Revenue, Airbnb already collects state taxes in all of Florida's 67 counties. But only 40 counties, including Sarasota and Hillsborough in 2017, have signed these bed tax agreements with the company. Within the Airbnb platform, each listing in those counties shows a line item for a bed tax fee. In 2017, the company said it had collected and remitted $45.7 million in taxes in Florida, with $12.7 million of that being bed taxes.

Burton wants a judge to decide whether Airbnb must collect bed taxes from Manatee County hosts and remit them to his office. The lawsuit, against Airbnb and Airbnb Payments Inc., does not say exactly how much the office believes it is entitled to. He has not sued Airbnb competitors like HomeAway, VRBO or Booking.com, according to filings.

"In failing to do so, Defendant Airbnb has been enriched at the expense of Manatee County and Manatee County's taxpayers," the lawsuit reads in part.

Neither Burton Jr. nor his listed attorney was immediately available for comment. When reached by phone Tuesday, his assistant stated that the office does not comment on pending litigation.

In response to the lawsuit, Airbnb Florida spokesman Ben Breit said in a written statement that the company was "disappointed that the (tax collector) resorted to litigation when we could have been helping to deliver Manatee County hundreds of thousands of dollars in bed tax revenue since we first contacted them."

Breit added that the company is still "committed to partnering with Manatee County on a prospective tax agreement to help our hosts easily pay their fair share."

In a February work session, the tax collector's office detailed to county commissioners why they haven't wanted to enter into a bed tax agreement with Airbnb.

"We're not going to compromise how we're willing to audit and report to sign to a private company," director of field services and collections Michele Schulz had said at the time.

Burton previously said that the additional bed tax revenue that would come in from signing the agreement amounted to $70,000.

Manatee County requires that "dealers" should "report individually on any properties such dealer owns and/or represents," leaving it up to the hosts and not necessarily the company to collect and remit bed taxes. Airbnb has no way of keeping track whether hosts are sending those taxes to the state. If Manatee County were to enter into an agreement, the county would have to amend an ordinance.

"The statute does appear to give flexibility. It doesn't have to be the tax collector (collecting bed taxes)," County Attorney Mickey Palmer said during a March meeting, adding that he wasn't for one argument or the other. He was not immediately available for comment on Tuesday.

The board then voted 4 to 3 to direct Palmer to look into the possibility of Manatee signing an agreement.

"It just makes so much sense of me to do this because we're missing out on revenues," Commissioner Betsy Benac said in February.

On Tuesday, Benac said she was "surprised" by the news of the lawsuit.

"I thought we were going down a path where we could work out an agreement," she said in a phone call to the Bradenton Herald on Tuesday, adding that a lawsuit is not "in the best interest of the taxpayers."

Commissioner Vanessa Baugh, who agreed with Benac on the issue, told the Herald by phone that she hopes the county will enter a bed tax agreement with Airbnb but added the lawsuit was "a step in the right direction."

"I have the utmost confidence in our tax collector," she said.