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Online Tourism Sites and Tourist Development Taxes


The COVID-19 pandemic has posed significant challenges to the normal operations of countless businesses throughout the country and the world.  Among the industries that have been particularly affected over the past several months is the tourism industry. Challenges have presented themselves in this industry at every level – globally, nationally, regionally, statewide and locally. Up and down the line, employers and employees at all levels have been affected by the business slowdowns and pauses.

Within the state of Florida, the effects of COVID-19 on the tourism industry have been acutely felt. According to news reports, the first quarter of this year saw a more than then percent decline in tourism in Florida, as compared to the same time period of 2019.

In addition to employers, employees, and consumers, another affected group – and one that may be overlooked as reopening occurs across the state and the nation – is local governments. Local governments have also suffered as a result of tourism slowdowns and pauses, and, as a Florida District Court of Appeals judge recently stated, will require an infusion of revenue as Florida’s residents’ business and personal lives resume post-pandemic.

Payment of Tourist Development Taxes 

In this case, the District Court of Appeal of Florida, Fourth District, was called on to decide if Airbnb and like businesses were obligated to collect a tax – known as a Tourist Development Tax – to remit to local taxing authorities.  The court found that the companies were not required to collect and remit the tax, based on the language of applicable Florida laws.

The court rejected the Tax Collector’s two arguments:

  • Airbnb and like companies exercised a “taxable privilege” by their business operations, and
  • even if the companies did not exercise a “taxable privilege,” they were still required to register as “dealers” because they receive payment on behalf of the owners of the properties advertised and rented through their sites

Basically, the court found that Airbnb and like companies were not in the business of renting or leasing accommodations within the meaning of the applicable laws, and that they were therefore not subject to taxation under those laws. The court also found that Airbnb and like companies were “conduits,” and not “dealers” subject to tax payments within the meaning of the applicable laws.

After the decision was reached, a procedural motion known as a motion for certification was made, which sought to have a specific question central to the case to be determined by the Florida Supreme Court. This motion was denied. However, one dissenting judge would have certified a specific question regarding the scope of the relevant laws.

If you would like to know more about this case, contact Sweeney Law. In addition, in the coming weeks and months, business owners, employers and employees in the tourism industry will likely have many questions and concerns regarding their rights, responsibilities and business operations. To discuss these questions and concerns with a Fort Lauderdale business lawyer, contact Sweeney Law.






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