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Committee member asks whether Airbnb tax is in effect as staff says hoteliers will cover card fees
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Summary
A committee member asked whether an ordinance passed at the prior meeting levying a tax on Airbnb is already in effect; a staff member said the city's contract option will pass merchant credit-card processing costs to hoteliers and short-term rental owners and that the effective date was not specified.
A committee member asked whether an ordinance passed at the previous meeting that levies a tax on Airbnb listings is already in effect, while a staff member said the city will pass merchant credit-card processing costs to hoteliers and short-term rental owners rather than absorb them.
The question came during a discussion of a payment-collection contract and an exhibit that lets the city decide whether to absorb merchant processing costs. The staff member confirmed the city will not absorb those costs: "the hoteliers and the short term rental owners will pay for those," the staff member said.
Why it matters: how the city chooses to handle merchant fees affects the net revenue from short-term rental taxes and who bears additional costs. It also signals how the city will operate its payment systems for the hospitality sector and short-term rental hosts.
Details: committee discussion focused on two linked points—(1) whether the city's contract permits credit-card payments and associated convenience or merchant fees, and (2) the status of a recently passed ordinance taxing Airbnb listings. A committee member asked whether the ordinance that "levies the tax on the Airbnb" is already in effect; at least in the discussion the effective date was not recalled.
A staff member said the contract exhibit includes an explicit option to choose whether the city absorbs merchant processing costs or passes them to payers, and confirmed the city will push the merchant processing cost onto those making payments rather than absorbing it. The staff member also noted that, because the short-term rental item is not yet codified as an ordinance in prior contexts, some requirements had not previously been required.
No formal vote or motion on the contract terms or the ordinance's effective date was recorded in the discussed segments. Staff suggested reorganizing or re-categorizing the items for clarity but did not provide a specific effective date for the short-term rental tax ordinance during this exchange.
Next steps: staff will finalize contract selections and categorization; the committee did not record a final action on the effective date in the provided discussion.
