ARDA and ARDA-ROC Work to Protect Timeshare from Property Tax Modifications (HB 2109 and HB 2298)

2016-04-10

Issue Brief

Filed 13 days apart, identical bills HB 2109 and HB 2298 pursue a modification to the definition of residential property for taxation as well as create a sales tax exemption for certain properties.

Both bills maintain that timeshare units exist within the definition of “residential property” with the exception to the extent that such units are rented. However, the language “bed and breakfast inns in which owner resides and uses a primary residence with ten or fewer rooms for rent” was added to the definition.

These bills are a result of arguments made by AirBnb owners, which claim that their property tax has to be prorated to meet commercial rates during the time their room or home is rented out. In addition, these bills (or the surviving bill) may become a catalyst to require AirBnb, VRBO and similar internet based booking sites that certain dwellings show proof of Health Department Licensure. 

Impact

These bills have the potential to include timeshare ownership under the umbrella of short-term rental properties such as AirBnb and VRBO. That being the case, timeshare interests may be subject to tax revisions, as well as requiring more restrictions on the timeshare owner. 

Position/Call to Action

ARDA and ARDA-ROC support regulation within the short-term rental marketplace, but monitors its definitions, ensuring that timeshare interests are not included in that language. 

Issue Updates

HB 2109 and HB 2298 were referred to the House Committee on Small Business as well as House Select Committee on Commerce, where they stayed through the end of session.

These bills will likely resurface during the next session, at which time ARDA and ARDA-ROC will monitor them closely to ensure that the provisions protecting timeshare are preserved. 

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