Finance committee forwards ordinance updating transient-occupancy tax reporting for short-term rental intermediaries

The Winchester City Finance Committee voted to forward an ordinance that updates the city's transient-occupancy tax (TOT) rules to match recent state legislation requiring accommodations intermediaries to collect and remit TOT and to provide reporting to the locality.

Powell, a staff presenter, told the committee the change "is a seemingly very simple and straightforward change to transient occupancy tax" but reflected years of work at the General Assembly level to bring large accommodations providers into compliance. He said hosts who use intermediaries such as short-term-rental platforms will be able to sign an attestation with the revenue office, and the intermediary will remit tax and provide "the full details we need to account for what that sum is." Powell added the change makes compliance "much more efficient for the host" and allows the city to "ensure we're getting the right revenue."

The ordinance includes a reference to confidentiality rules in state law. Powell said the compromise requires adherence to Code of Virginia confidentiality provisions and "prohibits us from sharing that information with our zoning and inspections department," limiting local sharing of intermediary-provided data even as the reporting requirement advances tax collection. He described the restriction as "not ideal" but said the step was worth taking to secure tax compliance.

Committee members asked about timing and whether the city could make the ordinance effective retroactively to July 1. Powell said the state legislation went into effect July 1 and that "they're not waiting for us to pass our ordinance to start doing this," so local timing would not hold up collections; July remittances would likely arrive in August. After brief discussion, a committee member moved to forward the measure with a recommendation for approval and the committee voice-voted to send it to a future council meeting with that recommendation.

The ordinance affects short-term rentals using intermediary platforms; Powell said it does not change transient-occupancy rules for brick-and-mortar lodging. He also said providers had agreed to provide data in a usable format for the city, but that state confidentiality rules constrain some intra-city sharing.

Next steps: the item will appear before the full Winchester City Council for consideration with the finance committee's recommendation for approval.