Airbnb settles federal lawsuit against Miami Beach over business and resort tax disclosures
Under the settlement, Airbnb hosts in Miami Beach must post their business and resort tax account numbers in their listings
UPDATED, Aug. 3, 6:45 p.m.: Airbnb has settled a federal lawsuit it brought against the city of Miami Beach, and both sides are claiming victory.
The vacation rental tech company sued Miami Beach in late 2018, after the city commission passed new regulations. Those measures require Airbnb to display the resort tax account and business tax receipt numbers for each listing by their hosts within zones that allow short-term rentals.
In its complaint, Airbnb alleged that the disclosure requirement would force the company to enforce the city’s rules in violation of federal laws.
In a statement, Airbnb said the settlement represents a “positive breakthrough” for the future of short-term rentals in Miami Beach.
“We welcome today’s settlement as a win-win for Airbnb and our Miami Beach hosts as we move towards a constructive and collaborative working relationship with the city,” the statement said. “It is a win for our hosts who will have certainty as to the rules and a win for the city when it comes to having a regulatory framework that will work.”
Meanwhile, Miami Beach officials put out a statement claiming Airbnb recognized it was “going to unequivocally lose” a frivolous lawsuit, and that the company agreed to pay the city $380,000 in attorney fees. “This is a major win for the city of Miami Beach,” said Mayor Dan Gelber in the statement. “Airbnb will be required to comply with our ordinance and not be permitted to violate the rights of our residents.”
An Airbnb spokesman disputed the city’s claim regarding attorney fees, pointing out the settlement agreement stipulates both sides are responsible for paying their own legal costs. But Airbnb did agree to pay the city $380,000 that Miami Beach can use at its sole discretion.
When the city passed new regulations last September, Airbnb believed that it was exempted because the company used “geofencing,” which prevents hosts from posting listings for homes in neighborhoods where short-term rentals are prohibited. In December, city officials informed Airbnb that the exemption did not apply to the company.
Under the settlement, Airbnb will now provide mandatory fields for hosts to fill out their business and resort tax information that the city will have to verify on its own. Airbnb will also not allow any listings that do not include the tax numbers. Airbnb and other home-sharing platforms that fail to provide the business and resort tax information face fines of $1,000 for the first offense and up to $5,000 for repeated violations.
According to Airbnb, hosts in Miami-Dade County earned a combined $204 million in income and delivered $10 million in bed taxes in 2018. Miami Beach imposes the county’s highest fines, as much as $20,000 for each offense, against property owners that operate illegal short-term rentals.