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The Marco Island City Council has shot down a proposal by one its members to capture unrealized bed tax revenues from property rentals, leaving the problem in Collier County's hands.

Councilor Victor Rios had proposed that Marco Island become proactive in making sure short-term rentals pay their fair share of taxes by registering with the city, but other members of the council felt there were few benefits to collecting the bed tax revenues and remitting them to the county.

"There wouldn't be any direct benefit to the city except that some time down the line when we receive some minute percentage of that back," Chairman Jared Grifoni said.

Collier County has been trying to negotiate with entities like Airbnb about collecting and paying its five percent bed tax for rentals less than six months but to no avail.

Under the county's rules, property owners renting for less than six months must collect and remit tax payments each month.

More: Home-sharing giant Airbnb faces Collier County lawsuit, lingering criticism from hoteliers

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More: Collier County still working toward deal with Airbnb on home rental tax

Earlier this year, Collier County tax collector Larry Ray filed suit on behalf of the county against Airbnb seeking current and past bed taxes.

Forty counties in Florida that do levy a bed tax currently have agreements with Airbnb, including Lee and Sarasota counties.

In a white paper Rios prepared about collecting bed taxes, he referenced communications with the county and fears about a large number of property owners using sites such as Airbnb, HomeAway and VRBO, and not collecting or remitting taxes.

During the discussion, Rios referenced his own experiences and his belief that there were a large number of property owners cheating the system.

Councilor Howard Reed, who earns some income from renting a home, disagreed with Rios's assessment of the level of cheating given the penalties of not remitting sales taxes to the state and bed taxes to the county. 

According to the Collier County tax collector's website, failure to collect or pay tourist taxes can result in criminal charges such as theft of state funds, refusal to file returns pay taxes due, failure to register, failure to file six consecutive returns, false or fraudulent returns or fraudulent claim of exemption. 

"I don't think that many people are risking going to jail to save a couple of bucks," Reed said.

While City Attorney Alan Gabriel said the city could approach vacation rental sites with agreements, he believed they would much rather negotiate with a larger entity like the county.

Grifoni said the city benefited more from people coming to Marco Island and spending their money than creating any time of regulatory framework to collect taxes on behalf of the county.

 

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