The city of Galveston is right to move cautiously toward a deal allowing HomeAway, a global vacation rental broker, to collect local hotel occupancy taxes on short-term rentals.

Such a deal offers interesting potential, but it also raises some serious questions.

Michael A. Smith: 409-683-5206; michael.smith@galvnews.com

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(5) comments

Jarvis Buckley

Should be considered

Bailey Jones

Airbnb and Homeaway both collect taxes in some cities already (including Houston, Conroe, and Corpus Christi). Each company collects taxes only for bookings made through its platform. To my mind, the real question is, why DOESN'T the city and state require collection of taxes? The 9% that the Park Board gets and the 6% that goes to the state isn't chump change. Unregistered owners who operate under the radar have an unfair advantage over those who obey the law - akin to a retail store not paying sales taxes. The $30M in HOT tax to the park board is compensation to residents who have to deal with the sometimes negative impacts of having a hospitality business in their midst.

If you have a vacation rental in your neighborhood, you can check whether it is registered - and paying taxes - here:

https://parkboard.destinationnext.com/HOT/property-search.aspx

Coote Wright-Broughton

What does HomeAway get from collecting the tax? Seems like it would cost a company to collect and manage these funds, a percentage or just the interest earned on the funds, what is there gain?

Andrew wright-broughton

Mary Branum

There are pluses and minuses on both sides.

5 years ago, a House Bill was presented to the State legislature requiring the OTA's to collect and remit HOT taxes. HA/VRBO were adamantly against as they stated they didn't have the infrastructure. Subsequently all these OTA's have learned they are leaving money on the table where they can earn interest. State collections alone allow them to retain 1% of the gross payable when remitted on time. Some owner/operators could less if the City and State collect an remit. Others are concerned the burden remains with the owner/operator in proof of remittance as the OTA's remit in a lump sum (no addresses). Nor do these same entities provide addresses to the City/State. So it is blind faith for remittance. Will there be more HOT income? Perhaps, but no guarantees. Many do not list on these websites. Are these OTA's looking at the best interests for cities and states? Not necessarily as they are the very ones who lobby every state to pass legislation preempting local authority by forbidding the ban of short term rentals anywhere. We have been successful in the last two legislative sessions preventing this to occur as Galveston's Ordinance and Land Development regulations work. Their sole goal is their bottom line. I see both sides and neither is a "one size fits all".

Theresa Elliott

Mary is spot on. Unless ABB payments can be audited by address, like any other registered tax payer, it’s a pretty “gray” proposal. And their lobbying efforts haven’t been in Galveston’s best interest so maybe this an opportunity to negotiate with them on that too.

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