Local Government Finance and the Sharing Economy Sunday, May 22 nd, 3:50 4:40, 1 CPE

Transcription

1 Local Government Finance and the Sharing Economy Sunday, May 22 nd, 3:50 4:40, 1 CPE Mickie Pearsall, Deputy Director of Finance, Milwaukee Metropolitan Sewerage District, WI David Augustine, Tax Collector, City of San Francisco, CA Greg Canally, Deputy Chief Financial Officer, City of Austin, TX

2 GFOA 2016 Annual Conference Local Government Finance & the Sharing Economy A View from San Francisco & Austin David Augustine, Tax Collector, City of San Francisco, CA Greg Canally, Deputy Chief Financial Officer, City of Austin, TX

3 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 3

4 Sharing Economy 4

5 The Sharing Economy 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 5

6 Current Landscape in San Francisco 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 5,400 short 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 6

7 Current Landscape in Austin Short Term Rentals Short Term Rentals (STR) Airbnb, HomeAway, VRBO Approximately 6,000 listings in Austin* Average Price per night: $286* Available listings today: 300 Price available today: $214/ night *Source: insideairbnb.com Growth in STRs Type 3 Type 2 Type 1 combined 7

8 Current Landscape in Austin Ridesharing 5 companies operate in the City Estimated 10,000+ rideshare drivers in Austin May 7 th Election 8

9 Stakeholders Austin experience with residents, renters, businesses in the STR business 2012 Council passes Short Term Rental Ordinance PACE, moratorium on Type 2, engagement with neighborhoods/strs, Code enforcement enhancement Update on Ridesharing election 2016 Austin City Council bans Type 2 STRs 9

10 Policy & Regulatory San Francisco What is a Short Term Residential Rental Host? 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). 10

11 Policy & Regulatory San Francisco Brief History Short Term Residential Rentals In 2012, the Tax Collector issued Regulation 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. 11

12 Policy & Regulatory San Francisco 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. 12

13 Policy & Regulatory Austin Ongoing and evolving discussion Short Term Rentals Currently licensed STRs: Cost of STR License: 1,169 $235/year + $50 inspection fee Ridesharing Ordinance Fingerprinting Reporting requirements Annual fee Airport surcharge May 7 th election 13

14 Policy & Regulatory Austin $1,600,000 Hotel Occupancy Tax Collections Short Term Rentals $1,200,000 $800,000 $400,000 $ Type 2 Type 3 Type 1 Combined Short Term Rental Licensing Revenues 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 RD AND 4TH QUARTER ESTIMATES 14

15 Tool & Rules & Lessons Learned San Francisco 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 15

16 Tool & Rules & Lessons Learned Austin On line payment HOT TNC fee collection 16

17 A Look Ahead Austin Vehicle Rental Tax Collections 20% Vehicle Rental Tax Collections 15% 10% Rideshare enters Austin 5% 0% Budget 5% TNC Ordinance Post Election Impact on tourism New economy businesses that use independent contractors to provide services increasing 17

18 Conclusion Comments & Discussion David Augustine, Tax Collector, City and County of San Francisco Greg Canally, Deputy CFO, City of Austin 18