AO 2016-66 Room Rental Hosting Platform Ordinance Assembly - - PowerPoint PPT Presentation

AO 2016-66 Room Rental Hosting Platform Ordinance

Assembly Worksession June 16, 2016 2:30 p.m. – 3:30 p.m.

AMC 12.20 Room Tax

Operator: a person or entity that owns,

• perates, or controls a facility that rents a

room 12% room tax applies to short-term rentals (less than 30-day continuous occupancy) 2016 Room Tax Budget = $27,254,348

• Revenue is split between General Government, the

Convention Center, and tourism promotion

Current mix of registered

• perators

1 Operator Classification Total Operators Economy 36 Mid-Market 37 Upper Market 7 Rooming House 22 Bed & Breakfast 89 Vacation Rental 113 Grand Total 304

Development of AO 2016-66

AMC 12.20 Room Tax - Enforcement Challenges

• Individual, small-scale operators offering a limited number of

rooms (i.e., condo, house, vacation rental) are difficult to identify and track

• High administrative expense to enforce compliance against the

population of individual operators, whose compliance involves:

Internet Hosting Platforms

• Product of modern technology over the last several years
• Shared-economy model / online marketplace
• Details of property owner & location are not openly disclosed to the MOA

2

• Registration
• Fiduciary requirements
• Tax return processing
• Delinquent tax collection
• Penalty and interest assessment
• Involuntary tax return processing

Registered Hosting Platforms

AMC 12.20.031 Registered hosting platforms

• “Hosting Platform” is newly defined in AMC 12.20
• Hosting platforms facilitate short-term room rental transactions (i.e.,

less than 30 days) by connecting potential hosts and guests, while also collecting money from guests

• AO 2016-66 applies to hosting platforms that have agreed to collect

MOA room tax and remit the tax on behalf of the operator

• Ordinance does not apply to hosting platforms that have not agreed

to remit tax to the MOA on behalf of the operator

3

Registered Hosting Platforms cont’d.

• A hosting platform that agrees to collect and remit MOA

room tax must comply with AMC 12.20 by doing the following:

Register with Treasury Provide a financial guarantee Comply with tax remittance and reporting requirements Preserve transaction records

• An Operator who exclusively uses a registered hosting

platform to rent rooms does not have to separately register with Treasury

4

Airbnb and Similar Sites

• For over a year, Treasury has been investigating several online hosting

platforms who have a presence in Anchorage, such as: Airbnb

• Treasury reached out to Airbnb to obtain voluntary compliance for

collecting and remitting room tax, and has been in discussions regarding an agreement for several months

5

• Airbnb
• VRBO
• HomeAway
• Flipkey
• HouseTrip
• Roomarama

Objectives of AO 2016-66

Levels the playing field by bringing currently unregistered short-term rental operators who use online hosting platforms into compliance with AMC 12.20 Increases room tax revenue to the MOA Treasury’s tax enforcement efforts are more productive

• Effective and efficient collection of room taxes
• Administrative efficiencies
• Less time required to pursue unknown operators

6

Timeline

June 7, 2016 Assembly meeting

• AO 2016-66 was introduced

June 21, 2016 Assembly meeting

• Public hearing and approval

7

Questions?

8