Groups at odds over budget provision on short-term home rentals

A group that represents the tech company Airbnb says it’s opposing a budget provision that would add requirements to homeowners who want to rent out their property on the platform.

The Travel Technology Association wrote to lawmakers warning of the “unintended consequences” of a tax provision that the Joint Finance Committee approved last week, saying it’ll add tax liability on companies like Airbnb and limit short-term rentals in the state.

“[The provision] threatens the availability of short-term rentals throughout Wisconsin by undermining private property rights and placing an undue tax burden on the platforms that act as intermediaries in facilitating many rentals,” Matt Kiessling, a vice president at the group, wrote to lawmakers.

But the Wisconsin Hotel & Lodging Association, which represents hotels and bed and breakfasts, says it’s only fair that the platforms collect all applicable taxes.

It’s the latest fight between the two groups, which last session argued over a bill that would have prohibited local governments from banning short-term rentals that last seven days or more.

The latest proposal would include that prohibition on local governments but addresses several other issues. For example, it requires a “lodging marketplace” such as Airbnb to register with the state and collect any state taxes and local room taxes.

The proposal comes months after Airbnb announced a tax agreement with the state Department of Revenue, which covers the state sales tax, the county sales and use tax and three taxes collected in parts of the state.

The agreement doesn’t cover the local room taxes that hotels are subject to, although Airbnb has struck deals with Green Bay and Madison and has said it wants to add more municipalities to that list.

Trisha Pugal, the president and CEO of the Wisconsin Hotel and Lodging Association, said the proposal would ensure Airbnb collects local room taxes and clarify that issue.

“It is confusing to people,” she said. “This would help clear the confusion.”

But Kiessling, the Travel Tech VP, wrote the proposal would add tax liability to short-term rental platforms instead of the homeowners that rent out their property.

“Those offering their properties are the ones with a physical presence in the state, and as property owners, already enjoy a relationship with both the Department of Revenue and their local political jurisdiction,” he wrote to lawmakers.

See the letter:

See the budget motion (item 13):

By Polo Rocha