The accommodation sharing community, which connects customers to potential individual vendors via the online marketplace, is on the rise. Companies such as Airbnb, Lyft, and Uber are becoming more prevalent, and with that, gaining more attention by state tax agencies. Jurisdictions are starting to charge hotel occupancy taxes for sharing accommodations over websites like Airbnb.
A recent Fortune article, “Call This Company the ‘Airbnb of Boats’ Then hop aboard” introduces the startup, Sailo, a boat accommodation sharing website. Sailo uses the same concept as Airbnb and offers many boats with sleeping accommodations on board. One question is—does the availability of the overnight accommodation on these boats subject their rental on Sailo to state hotel occupancy taxes?
Sailo’s Terms of Service do not appear to address this, stating only that the boat owners/captains are responsible for determining local indirect taxes and including them in the listing on the website.
The tax laws in the two states where Sailo has offices, Florida and New York deal with hotel taxes and boat taxes differently.
New York imposes a hotel occupancy tax, made of a 4 percent state sales tax plus a local tax. Boat rentals in New York are also subject to sales tax as tangible personal property, therefore, at the state level, there is no difference in taxation between a hotel occupancy tax and sales tax on rentals of boats. Florida, does not even have an excise tax for transient accommodations (hotels), only a sales tax of 6 percent. Boat rentals in Florida are also charged a sales tax of 6 percent.
If Florida wanted to implement an excise tax for hotel occupancy on transient accommodations, as it stands, boats with sleeping accommodations (other than house boats) would still not fall prey to the tax due to the limitation on the transient accommodation definition: a living quarter or sleeping accommodation in any boat that has a permanent and fixed location at a dock and is not operated on the water away from the dock by the tenant.
In order for New York to subject boats with sleeping accommodations to an extra excise tax, it seems the state would have to redefine a hotel occupancy tax as something other than a sales tax.
With the unlimited access to resources via the internet, the sharing economy has unlimited potential. States that want to capitalize on these resources should consider amending some of their tax statutes.
Continue the conversation on Bloomberg BNA’s State Tax Group’s LinkedIn page: What states would tax hotel occupancy different than sales and use taxes for boat rentals? What other sharing accommodation businesses are likely to fall prey to future taxation?
For more information about state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library .
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