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Senate finance panel backs amendment letting owners choose merchant of record for short-term rentals, requires broader remittance and reporting
Summary
The Senate Finance Committee adopted an amendment to an accommodations-tax bill allowing property owners to elect whether an intermediary (such as Airbnb) or a property manager is the merchant of record, and requiring the merchant of record to remit state and local ATAX funds and provide property-level remittance data to DOR; the amended bill passed the committee 12-8.
The Senate Finance Committee voted 12-8 to report out an amended accommodations-tax bill after an extended debate over who should be the "merchant of record" for short-term rental bookings.
Senator Davis, who offered the amendment, said the central issue "has to do with who holds the money and who gets the time value of that money while it's being held." His amendment allows a property owner to elect whether a qualified intermediary (for example, Airbnb) or a private property management company will be the merchant of record for a particular booking.
Davis told the committee the amendment requires the selected merchant of record to remit the state portion of the accommodations tax to the Department of Revenue (DOR) and to remit local ATAX dollars to municipalities beyond a set of 16 jurisdictions that previously reached a settlement with a major platform. The amendment also requires the merchant of record to provide property-level remittance information to DOR and municipalities so local governments can see which properties generated the revenue.
Supporters said the change would increase voluntary compliance and give municipalities necessary data. "It may allow them to determine whether or not short-term rental activity is occurring in zones where it's permissible," Davis said when discussing how municipalities could use remittance data.
Opponents warned the change could interfere with private contracts between platforms and property managers, potentially prompting legal challenges. One committee member said the House version of the bill "impairs that contract to a greater degree than my amendment does," and another warned the proposal could impose new regulatory burdens on businesses.
Members of law enforcement expressed a separate concern: some sheriffs asked whether platforms' background-check policies would persist if the platforms cease being the merchant of record. Davis said platforms run background checks as a matter of internal policy but that the amendment did not itself change those obligations.
Davis acknowledged constitutional risk. "It might as well just be frank, this bill is likely to be contested," he said, noting stakeholders are divided and a court challenge or floor objections are possible.
The committee adopted the Davis amendment by voice vote, then moved the bill as amended; the final committee tally for the amended ATAX item was announced as 12 in favor and 8 opposed.
The committee also debated related operational points, including whether intermediaries currently remit local ATAX only to municipalities in certain settlement agreements and whether consolidating remittance and reporting via DOR would ease municipal tracking and auditing. Davis said the amendment "attempts to look at all five of those stakeholder interests" (intermediaries, property managers, property owners, local governments and DOR).
The committee reported the bill as amended; further action will depend on scheduling on the floor and any legal review that interested parties may pursue.
