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, Current mix of registered operates, or controls a facility that rents a operators room Operator Total Classification Operators 12% room tax applies to short-term rentals Economy 36 (less than 30-day continuous occupancy) Mid-Market 37 Upper Market 7 Rooming House 22 2016 Room Tax Budget = $27,254,348 Bed & Breakfast 89 • Revenue is split between General Government, the Vacation Rental 113 Convention Center, and tourism promotion Grand Total 304 1

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

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: o Airbnb o Flipkey o VRBO o HouseTrip o HomeAway o Roomarama 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

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