ORLA Advocacy Key Issue

Leveling the Field on Short Term Vacation Rentals

Local vacation home rental owners have raised concerns over third-party internet platforms that provide a similar service of connecting home owners with travelers. These services include online companies such as airbnb, HomeAway, VRBO and others. The uneasiness stems from hundreds of non-compliant vacation home rentals in Portland, Eugene, Ashland and other cities advertising on these internet commerce sites without regard for licensing and state tax regulations.

In the case of HomeAway.com, some states – Hawaii for example – have a law that requires all participating vacation rental homeowners be licensed and have a transient room tax (TRT) certificate and account number.

Among the Issues of Concern are Taxation and Consumer Safety
The City of Portland and airbnb.com have engaged in discussion recently with the expectation that airbnb will locate its office headquarters in Portland. Some believe the outcome of those deliberations will result in airbnb requiring participants to collect and remit TRT in Portland, but not in their other operating jurisdictions.

Taxation is one issue; the safety of consumers and the potential for neighborhood backlash are also items that have been brought up, but it does not appear that these concerns are truly being addressed.

Establishing Oregon’s Compliance Framework
Much like the system that was enacted in Hawaii, the State of Oregon should pass legislation that requires short term home rental properties to register with their local taxing authority before they are marketed through online exchange sites. Additionally, for jurisdictions that have a business licensing program in place, operators should secure the proper licenses.

While state law needs to acknowledge that some smaller municipalities do not have the resources to carry out inspections for consumer protection, the law can define when and where such inspections are appropriate.

During the business registration process, operators should also show that they have notified their insurance carrier and lending institution that a commercial transaction is occurring on the premises. In areas where there aren’t enough local resources to monitor safeguards, insurance carriers will most likely require coverage for protection and liability – beyond a customary homeowner policy. And finally, operators should report and remit their room tax collections.

Leveling the Playing Field on Vacation Home Rentals
Once all vacation home rentals operate by the same set of rules, consumers will be better protected, TRT collections will increase to the advantage of local communities, and businesses that provide this service will compete on a level playing field.

Once a rental is advertised and chosen on a third-party global website, it becomes a business transaction – with benefits and obligations to boot.