Palm Beach County is cracking down on vacation-rental owners, and increased enforcement last year reaped about $300,000 in additional bed taxes.
Tax Collector Anne Gannon told the Tourist Development Council on Thursday that she challenged her employees to come up with a plan to identify and collect from more short-term rental unit owners. Her office now uses information from vacation-rental-by-owner websites, Department of Revenue collections, the property appraiser’s office, anonymous tips and even utility use records.
Also, don’t put your condo up for sale and boast about rental revenue if you haven’t paid your tourism taxes.
Only about 7 percent of bed tax collections are from these vacation rental sources. Hotels and motels accounted for 93 percent of the $4.66 million collected in April, according to TDC reports. Back-to-back $4 million months, a first for Palm Beach County, has collections nearly 16 percent ahead of this time last year.
The county charges 5 percent on each lodging night — that’s hotels, short-term condo rentals and campgrounds. And 48 percent of the $27 million that was collected last year was used for direct promotion of the destination through marketing, ads and grants to groups that hold festivals and sports tournaments.
While the vacation rental figures may be a small portion of tourism tax revenues, TDC board member Roger Amidon said tourism officials have pushed for heightened enforcement for about three years. He started the initiative as TDC executive director, a role he left last fall to return to hotel management.
“There is a lot of money on the table. She focused in on it,” he said of Gannon, “and here we are three years later collecting more money.”
Beginning last year with a pilot program in Palm Beach Shores, enforcement officers have focused on defined areas, including Delray Beach and Wellington during the winter equestrian season, she said. Coming up are such other South County areas as Boynton Beach and Hypoluxo, because that’s where more condos are located. But Gannon said she will move into the North County area soon.
“We knocked on a lot of doors,” Gannon said.
Short-term rentals are harder to identify partly because they are less visible and partly because owners have to provide little documentation with tax payments to show the rental activity. Gannon is working on that last part through the Department of Revenue.
But when officers went door-to-door in Palm Beach Shores last July, they added 15 percent of the units they targeted to the tourism tax rolls, Tax Services Director Pat Bradley said. And when they add a property to the roll, they bill the owner for the entire time he has been renting out the unit.
Gannon said her office has educated homeowner groups and Realtors. “And frankly, most of our HOAs have been very helpful,” she said.
Also, residents who live in communities are often happy to report on neighbors who are renting short-term. Even if no one answers at the unit in question, Gannon said, often her officers get the information they need.
Anyone who rents a room, house, condo or other lodging unit for less than six months must pay tourism taxes, known as bed taxes, of 5 percent of the rental price.
Tax collector’s attempts to collect
> Investigating online rental listings, etc.
> Knocking on doors in targeted neighborhoods
> Educating HOAs and Realtors
> Handing out tip/complaint forms
> Registering properties
> Auditing registered properties
> Initiating enforcement process
> Monetary injunction is last resort
Bed tax revenue by source
93 percent - hotels and motels
1 percent - condos
2 percent - single-family homes
1 percent - Realtor/leasing
1 percent - timeshare
2 percent - other
Source: Palm Beach County Tax Collector’s Office