Local Government Finance and the Sharing Economy Sunday ... · Local Government Finance and the...
Transcript of Local Government Finance and the Sharing Economy Sunday ... · Local Government Finance and the...
Local Government Finance and the Sharing EconomySunday, May 22nd, 3:50 – 4:40, 1 CPEMickie Pearsall, Deputy Director of Finance, Milwaukee
Metropolitan Sewerage District, WIDavid Augustine, Tax Collector, City of San Francisco, CAGreg Canally, Deputy Chief Financial Officer, City of Austin, TX
Local Government Finance & the Sharing Economy
David Augustine, Tax Collector, City of San Francisco, CAGreg Canally, Deputy Chief Financial Officer, City of Austin, TX
GFOA 2016 Annual Conference
A View from San Francisco & Austin
Today’s Presentation
Overview of the Sharing Economy
How it Looks in San Francisco & Austin
The Stakeholders
Policy & Regulatory Environment
Tools & Rules & Lessons Learned
A look ahead …
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Broad definition• “A business model that allows providers and consumers to share
resources and services, from housing to vehicles and more”• Shared Work Space, Independent Contractors (Favor), STRs, Ridesharing
• Low barriers to entry
Local Laws Important • “Engaging in Business” may trigger a business registration requirement
for independent contractors • Collecting “rent” for “occupancy” triggers Transient Occupancy Tax
obligations• Other laws may apply as well• Important to treat all businesses fairly and similarly
The Sharing Economy
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• Business Landscape• Currently have about 105,000 registered businesses in San Francisco
• Number may increase with new‐economy businesses now operating
• According to the San Francisco Chronicle (2015), there were 5,400short‐term residential rentals available on one website alone, with an average rent of $202 per night
• Our office has contacted 37,000 drivers for Transportation Network Companies who drive in San Francisco
• Independent contractors provide personal services through other platforms as well
• Want to make the experience as smooth and simple as possible for new taxpayers and for tax administration
Current Landscape in San Francisco
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Current Landscape in Austin – Short Term Rentals
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• Approximately 6,000 listings in Austin*• Average Price per night: $286*• Available listings today: 300• Price available today: $214/ night
Short Term Rentals (STR) –Airbnb, HomeAway, VRBO
*Source: insideairbnb.com
Growth in STRs
01002003004005006007008009001000
2012 2013 2014 2015
Type 3 Type 2 Type 1 combined
• 5 companies operate in the City• Estimated 10,000+ rideshare drivers in Austin• May 7th Election
Current Landscape in Austin – Ridesharing
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Austin experience with residents, renters, businesses in the STR business
Update on Ridesharing election
Stakeholders
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2012 • Council passes Short Term Rental Ordinance
2012‐2015 • PACE, moratorium on Type 2, engagement with neighborhoods/STRs, Code enforcement enhancement
2016 • Austin City Council bans Type 2 STRs
• A short‐term residential rental host (“host”) is a person that receives rent in exchange for providing short‐term (less than 30 days) accommodations in a residential structure.
• Some hosts receive payment of rent via a website company, while others receive payment directly from the guest.
• All of these transactions are subject to San Francisco tax laws‐including a registration fee and the Transient Occupancy Tax (TOT, aka “Hotel Tax).
Policy & Regulatory – San Francisco
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What is a Short Term Residential Rental Host?
• In 2012, the Tax Collector issued Regulation 2012‐1 to address how San Francisco’s Transient Occupancy Tax applies to short‐term residential rental transactions.
• In 2014, the Office of the Treasurer &Tax Collector published guidance to website companies about how to become qualified to act as their host's agent for collection of TOT.
• In 2015, the Office of the Treasurer &Tax Collector created a "Small Operator" designation to simplify tax filing requirements for hosts earning $40,000 or less; designated Airbnb as a Qualified Website Company; and created an online business registration solution for hosts.
Policy & Regulatory – San Francisco
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Brief History – Short Term Residential Rentals
Transportation Network Company Drivers• Recent effort to contact 37,000
drivers for Transportation Network Companies who drive in San Francisco
• Independent contractors are required to obtain a Business Registration Certificate
• Goal of mailing: Tell us more information—not in business, employee status, exempt, already registered. Or register.
Policy & Regulatory – San Francisco
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Policy & Regulatory – Austin
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Ongoing and evolving discussion
Currently licensed STRs:
1,169
Cost of STR License:
$235/year + $50 inspection
fee
Short Term Rentals
Ridesharing• Ordinance 20151217‐075
• Fingerprinting• Reporting requirements• Annual fee
• Airport surcharge • May 7th election
Policy & Regulatory – Austin
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FY 2013 FY 2014 FY 2015 FY 2016 *
1ST QTR $29,375 $32,935 $50,441 $96,300
2ND QTR $52,640 $135,355 $117,165 $120,370
3RD QTR $26,220 $58,720 $70,904 $70,500
4TH QTR $35,250 $68,200 $102,175 $59,455
TOTAL $143,485 $295,210 $340,685 $346,625
* FY 2016 3RD AND 4TH QUARTER ESTIMATES
Short Term Rental Licensing Revenues
$‐
$400,000
$800,000
$1,200,000
$1,600,000
2012 2013 2014 2015
Hotel Occupancy Tax Collections ‐ Short Term Rentals
Type 2 Type 3 Type 1 Combined
Tool & Rules & Lessons Learned – San Francisco
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• What We are Doing• Collecting taxes and ensuring compliance with our local tax laws• Working with other departments to connect hosts to their other
responsibilities
• What We Are Not Doing• Enforcing non‐tax laws (some information exchange)• Prohibiting anybody from paying taxes
• Responses • Thousands of hosts now registered and paying TOT• Tens of thousands of TNC divers aware of registration obligations
• Lessons• Know your law• Going online critical • Outreach important • Core focus – tax collection
‐5%
0%
5%
10%
15%
20%
2012 2013 2014 2015 2016 Budget
Vehicle Rental Tax Collections
A Look Ahead
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Austin• Vehicle Rental Tax Collections
• TNC Ordinance – Post Election • Impact on tourism
• New economy businesses that use independent contractors to provide services increasing
Rideshare enters Austin
Conclusion
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Comments & Discussion
David Augustine, Tax Collector, City and County of San [email protected]
www.sftreasurer.org
Greg Canally, Deputy CFO, City of [email protected]
www.austintexas.gov/financeonline/finance/index.cfm