(The Center Square) — A new report has been released by Florida TaxWatch documenting the economic impact of unlicensed vacation rentals in the Sunshine State as lawmakers try to correct the issues via legislation.
The report, Unlicensed Vacation Rentals: An Analysis of Florida’s Tourism-Driven Economy, states that unlicensed vacation rentals need more transparency amid instances of tax evasion. They also threaten the safety of short-term renters and neighbors by avoiding safety precautions such as fire code compliance.
Lawmakers are advancing legislation to deal with the issue.
Sen. Nick DiCeglie, R- St. Petersburg, had his vacation rental bill, Senate Bill 280, advanced Thursday by the Senate Committee on Fiscal Policy. DiCeglie stated during his bill’s introduction that it does several things, including tax collection through advertising platforms and paying fees to operate.
“The goal here is very simply to create a uniform set of standards of regulations for vacation rentals,” DiCeglie said. “In my opinion, that is going to create predictability at the local level for local governments, for the residents who live in the community, for property owners who want to exercise their property rights and for the platforms.”
Florida TaxWatch President and CEO Dominic M. Calabro said in a news release that reform is needed because of the risks posed to renters and taxpayers.
“While vacation rental properties play a critical role in Florida’s tourism-driven economy, unlicensed vacation rentals have become all too common, posing a risk to the wellbeing of renters and, given the fraudulent withholding of tax dollars, potentially increasing the cost burden on dutiful taxpayers,” Calabro said in the news release.
According to the report, around 137 million people visited Florida in 2022, with the state having approximately 174,000 condos and dwellings licensed as vacation rentals. This is a 33% increase when comparing numbers to 2017.
The report went on to note that there are at least 49,280 vacation rentals not licensed in Florida. The report also estimated that just one day of unlicensed rental activity in Nov. 2023 could cost the Sunshine State over $21.3 million in lost property taxes, licensing fees, local taxes and registration costs.
Florida TaxWatch recommended that lawmakers establish a source of data to track vacation rental activity, require registration numbers to be posted on hosting platforms and establish a way for hosting platforms to collect and remit local and state taxes, which would be subject to regular auditing. It was further recommended that lawmakers get stakeholders involved in the process.