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Item Q55 CM ounty of onroe BOARD OF COUNTY COMMISSIONERS  Mayor Heather Carruthers, District 3 Mayor Pro Tem George Neugent, District 2 TheFloridaKeys Danny L. Kolhage, District 1 David Rice, District 4 Sylvia J. Murphy, District 5 County Commission Meeting June 15, 2016 Agenda Item Number: Q.5  Agenda Item Summary #1742 BULK ITEM: DEPARTMENT: No County Attorney's Office TIME APPROXIMATE:STAFF CONTACT: Bob Shillinger (305) 292-3470 10:45 A.M. AGENDA ITEM WORDING: Discussion and direction regarding collection of Tourist Development Taxes and Tourist Impact Taxes from AirBnB. ITEM BACKGROUND: AirBnB is an online company that connects property owners with prospective vacation rental tenants. AirBnB facilitates the exchange of money between the landlord and the tenant for these short term rentals. According to its website, AirBnB remits sales taxes from rentals to the State of Florida but only collects and remits tourist development taxes from those counties (Brevard, Hernando, Lee, Orange, and Pinellas) which have entered into voluntary collection agreements with AirBnB as well as those 22 counties where the Department of Revenue collects tourist development tax on their behalf. https://www.airbnb.com/help/article/653/in-what- areas-is-occupancy-tax-collection-and-remittance-by-airbnb-available Monroe County Tax Collector Danise Henriquez has declined to enter into a similar agreement (see attached draft) for Monroe County due to concerns over contract terms that would limit her ability to: a) audit to ensure collections are accurate; b) collect back taxes; and c) identify rental unit owners. County staff shares Mrs. Henriquez' concerns. In addition, staff is concerned that entering into the proposed agreement, as drafted, would facilitate violations of the County's vacation rental ordinance. AirBnB's willingness to enter into an agreement to pay tourist development taxes would seem to suggest an acknowledgment of its liability for paying bed taxes. One option would be to take steps to enforce compliance through litigation. In the past, Monroe County led a class action suit against the online travel companies which resulted in a settlement agreement in 2010 under which the online companies paid approximately $6.5 million to resolve the matter rather than try the case. Other counties, which opted out of the class to pursue similar actions on their own, were unsuccessful. The County Attorney reached out to attorney Jay Shapiro, who represented Monroe County in that class action suit to see if there was any interest in pursuing a similar claim against AirBnB. Mr. Shapiro is interested in pursuing the matter on a contingency fee basis on behalf of Monroe County provided that there are a sufficient number of additional counties willing to join in the suit as co- 4EGOIX4K 5 plaintiffs. PREVIOUS RELEVANT BOCC ACTION: n/a CONTRACT/AGREEMENT CHANGES: None STAFF RECOMMENDATION: Authorize County Attorney to negotiate an agreement with attorney Jay Shapiro of Stearns Weaver Miller Weissler Alhadeff & Sitterson, subject to subsequent approval by the BOCC, and to encourage other counties who have not entered into collection agreements with AirBnB to join in the action. DOCUMENTATION: Monroe County FL Draft AirBnB agreement FINANCIAL IMPACT: Effective Date: n/a Expiration Date: n/a Total Dollar Value of Contract: Total Cost to County: Current Year Portion: Budgeted: Source of Funds: CPI: Indirect Costs: Estimated Ongoing Costs Not Included in above dollar amounts: Revenue Producing: If yes, amount: Grant: County Match : Insurance Required: Additional Details: n/a REVIEWED BY: Bob Shillinger Completed 05/31/2016 10:58 AM Budget and Finance Completed 05/31/2016 10:59 AM Kathy Peters Completed 05/31/2016 11:06 AM Board of County Commissioners Pending 06/15/2016 9:00 AM 4EGOIX4K 5E VOLUNTARY COLLECTION AGREEMENT FOR MONROECOUNTYTOURIST DEVELOPMENT TAX THIS VOLUNTARY COLLECTION AGREEMENTAgreement (the “”) is AIRBNB,INC. dated_________________, 2016and is between ,a Delaware corporation AirbnbTAXCOLLECTOR OF MONROECOUNTY, FLORIDATax (“”)and the(the “ CollectorParty ”).Each party may be referred to individually as a “” and collectively as the Parties “.” RECITALS: WHEREAS, Airbnbrepresents that it provides an Internet-basedplatform through which Host a third party desiring to offer an accommodation (a“”) and a third party desiring to book an Guest accommodation (a“”) have the opportunity to communicate, negotiate and consummate a Booking Transaction booking transaction for accommodations (“”) pursuant to a direct Platform agreement between Host and Guestto which Airbnbis not a party(the “”); WHEREAS, Airbnbrepresents that any agreement regarding a Booking Transaction throughuse of thePlatformis between the Host and Guest only, that Airbnbis not a party to such agreements, that a Host exclusively determines the price to be charged,the dates to book such accommodations, the parties with whom to transact and all other material terms of such agreements, that only the Host and not Airbnbhas the right and ability to accept and book an accommodation, and that Airbnb does not own anyrealproperty and does not have any possessory interest in any real property or accommodations offered by Hosts(including, but not limited to, as an owner, lessee, sublessee, mortgagee in possession, licensee, agent or in any other capacity), and therefore cannot and does not transfer any possessory interest in any property or accommodationsto any person; WHEREAS, Airbnbrepresents that it is not an owner, proprietor, managing agent, dealer, vendoror otherwise operator of any hotel, motel,room,or accommodation of any kindwithin County the meaning of applicable law in Monroe County (the “”). Airbnb represents it does not receive, collect or charge rent, or other taxable consideration relating tooccupancy,within the meaning of applicableCountylaws. WHEREAS, the legal rights, remedies and obligations of Airbnb, Hosts and Guests using TOS the Platform are specified in a document titled “Terms of Service” (the “”)and other 1 CONFIDENTIAL 4EGOIX4K 5E policies and procedures available at www.airbnb.com, including, but not limited to, certainTOS provisions to which Hosts and Guests have agreedthat when or if Airbnb determines to assist with collection and remittance of occupancy taxes in a given jurisdiction, users grant Airbnb authority toregister, report, collect and remit the applicableoccupancy taxespursuant to this Agreement and the TOS; WHEREAS, the Tax Collectorand Airbnbenter into this Agreementvoluntarilyin order to facilitate the reporting, collection and remittance of applicableoccupancy taxesfrom Hosts and Guests, resulting fromBooking Transactionscompleted by Hosts and Guestson the Platform for occupancy of accommodationslocated in the County,in accordance withthis Agreement. 2 CONFIDENTIAL 4EGOIX4K 5E NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS, PROMISES AND AGREEMENTS CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS: (A)With respect toBooking Transactions between Hosts and Guests completed onthe TDT Platform foraccommodations for which Monroe County Tourist Development Tax (“”), Code imposed under applicableCountylaw (the applicable “”), and during the period in which this Agreement is effective(as defined below), and solely pursuant to the terms and conditions of this Agreement, Airbnbagrees contractually to assume the duties of aTDTdealeras described in Dealer the Code(hereinafter referred to as “”). (B) Airbnb neither agrees to undertake,nor undertakes any obligationto assume the dutiesof aDealeranddoes not agree to undertake any obligation contractually or otherwise to collect or remit TDTrelating to any user’s transaction completed, made or facilitatedthrough any means, ormethodor other platform,other than theHost or Guest’s use of the Platform.Any obligation assumed by Airbnb pursuant to this Agreement (during any period in which it is effective) shall be limited to users completing Booking Transactions directly between theGuest and Hostthrough their use of the Platform. PROSPECTIVE COLLECTION OF TDT Effective Date (C)Starting on_______________(the “”),Airbnbagrees to commence collectingand remittingTDT, pursuant to the terms of this Agreement, at the applicable rate,on completed Booking Transactionsfor occupancyof accommodations located in the County between a Guest and Host who use the Platform. For the avoidance of doubt, this agreementto collectshall not extend to any period or transaction prior to the Effective Dateor after the termination of this Agreement or to any user’s transaction completed, through any means, method or platform, other than the Platform. REMITTANCE OF TDT (D) Airbnbagrees toreasonably reportaggregate information onthe tax return form prescribed by the Tax Collector,includingall TDTthat is subject to the provisions of this Agreement,and it shall remit all TDTcollected from Guests in accordance with this Agreement and the TOS and evidenced on such returnsin the time and manner described in the Codeor as agreed between the Parties in writing.For the avoidance of doubt, except as may expressly be 3 CONFIDENTIAL 4EGOIX4K 5E agreed to herein, Airbnb does not agree to produce personally identifiable information on users of the Platform pursuant to tax collection that is the subject of this Agreement. AIRBNBLIABILITY (E)On a prospective basis upon the Effective Date of this Agreement, andduring any period in which this Agreement is in effect,in accordance with the terms of this Agreement, Airbnbagrees contractually to assume liability for any failure to report, collect and/or remit the correct amount of TDT, including, but not limited to, penalties and interest, lawfully and properly imposed in compliance with law. Nothing contained herein nor any action taken pursuant to this Agreement, including but not limited to the collection or remittance of TDT, shall impair, restrict or prevent Airbnb from asserting that any TDTand/or penalties, interest, fines or other amounts assessed against it were not due, are the subject of a claim for refund under applicable lawor enforcing any and all rights accorded to it pursuant to law. (F)During any period in which this Agreement is in effect, and Airbnb is not in breach of its obligations under this Agreement, then with respect to Booking Transactions covered by this Agreement, the Tax Collectoragrees to audit Airbnbon the basis of TDTreturnsand supporting documentationfiled by Airbnb with the Tax Collectorand shall not directly or indirectly audit any individual Guest or Host relating to such Booking Transactionsunless and until an auditof Airbnbby the Tax Collectorhas been exhausted with the matter unresolved. (G)With respect to any audit of completed Booking Transactions that are subject to this Agreementduring any period in which it is effective, the Tax Collectoragrees toaudit Airbnb on an anonymous numbered account basis.The Parties agree that Airbnb shall not be required to produce any personally identifiable information relating to any Host or Guestand/or relating to any Booking Transactionin connection with an audit or otherwise without binding legal process served only after completion of such auditby the Tax Departmentof Airbnb with respect to such Host or Guest.The Tax Collectoragrees thatfor TDTpurposes, it will limit its auditofAirbnb and/orany assessmentagainst Airbnbfor alleged undercollection of TDTto no more than a consecutive twelve (12) month tax periodwithin any consecutive forty-eight (48) month period. (H) TheTax Collectoragreesthatpursuant tothis Agreementand during the period in which it is effective,Airbnbagrees to register as aDealerfor the reporting, collection and remittance of TDT,in connectionwith its obligations assumed under the Code and as set forth in this Agreement.Registration with the Tax Collectorand the issuance of any certificate of 4 CONFIDENTIAL 4EGOIX4K 5E th authority will be in the name of Airbnb, Inc. at 888 Brannan Street, 4Floor, San Francisco, CA 94103. Airbnb, Inc. will be the registered taxpayer on behalf of any subsidiary or affiliate of Airbnb, Inc. collecting TDTfrom Guests. GUEST AND HOST LIABILITY (I)During any period in which this Agreement is effective,and solely with respect to a Host’s activity on the Platform,said Host shall not be required toindividually registerwith the Tax Collectorto collect,remitand reportTDT, under the Code, on the condition thatAirbnbis in compliance with its obligations under this Agreementand the Code.Nothing in this Agreement shall relieve Guests or Hosts from any responsibilities with respect to TDT, including any obligation to register with the Tax Collectorto collect, remit and report TDTfor a user’s transactionscompleted through any means, method, device or platform other than the Platform, or restrict the Tax Collectorfrom investigating or enforcing any provision of applicable law against such usersfor any occupancy arranged directly or through a means other than the Platform. (J)Nothing herein shall relieve any Guest or Hostof liabilityfor TDTimposed by the Code, except as noted in paragraphs(E)(F), (G),(H), (I)and (K) herein,nor limit the Tax Collector’sauthority to hold such Guest or Hostresponsible for any applicable TDT, penalties and interest for which they may be liable, including, but not limited to, civil and criminal penalties arising from inaccurate,false or misleading representations made toAirbnbor the Tax Collectorby such Guest or Host,whether or not such representations were, in fact, relied upon by Airbnbor the Tax Collectorin complying with its responsibilities under this Agreement. WAIVER OF LOOK-BACK (K) The terms of this Agreement shall be prospective only as of the Effective Date and the County expressly releases, acquits, waives and forever discharges Airbnb, its current or past affiliated parent or subsidiary companies, directors, shareholders investors, employees and other agents, and/or Hosts or Guests from any and all actions, causes of action, indebtedness, suits, damages or claims arising out of or relating to payment of and/or collection of TDTor other tax indebtedness, including but not limited to penalties, fines, interest or other payments relating to TDTon any Booking Transactions completed on the Platform prior to the Effective Date. Nothing contained in this Paragraph or in this Agreement shall impair or prevent the County 5 CONFIDENTIAL 4EGOIX4K 5E from collecting alleged indebtedness related to TDTfor transactions completed through any means, method, device or platform other than the Platform. Nothing contained in this Paragraph of this Agreement will constitute a release or waiver of any claim, cause of action or indebtedness that the County may have or claim to have against any Host or Guest unrelated to TDTor the matters released herein. NOTIFICATION TOGUESTS AND HOSTS (L)Airbnbagrees, for the purposes of facilitating this Agreement, and as required by its TOS, that it will notify(i) Hosts that TDTwill be collected and remitted to the Tax Collectoras of the Effective Date pursuant to the terms of this Agreement; and (ii) Guests and Hosts of the amount of TDTcollected and remitted on each Booking Transaction. Additionally, the Parties agree that Airbnb may, at its discretion, notify Hosts of the specific provisions of paragraphs (I), (J) and (K) of this Agreement. PROSPECTIVE TAX TREATMENT (M)Collection and remittance of TDTunder this Agreement shall begin on the Effective Date. LIMITATION OF APPLICATION (N) This Agreement is solely for the purpose of facilitating the administration and collection of the TDTwith respect to Booking Transactionsand, except with respect to the rights and liabilities set forthherein, the execution and implementation of this Agreement by the Parties, including but not limited to, the collection and/or remittance of TDT,shall not be considered an admission or evidence of any issue of law or fact arising under the Codeor any other provisions of the laws of the United States of Americaor of any State, county or municipal entity thereof.By entering intoor acting pursuant to the terms ofthis Agreement, including but not limited to collectingand/or remitting TDT, Airbnb does not waive, and expressly preserves, any and all arguments, contentions, claims, causes of action, defensesor assertionsto, without limitation, (i) contest the validityof any construction of the Code that extendsbeyondthe express terms of the ordinance;(ii) contest that Airbnb is anoperator, vendor, or any other entity responsible for the operation of an accommodations business subject to regulation or to the collection or remittance of TDT,or (iii)contest thatAirbnbcharges,collects,receives or 6 CONFIDENTIAL 4EGOIX4K 5E otherwise comes into possession of taxable consideration or that a third party is occupying an accommodation subject to tax. MODIFICATIONS (O)No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom the modification, amendment or waiver is to be asserted. DURATION/TERMINATION (P)This Agreement shall apply to Booking Transactionsmade on or after the Effective Dateand shall remain in effect unless terminated in accordance with paragraph (Q) below. (Q) This Agreement may be terminated by Airbnbor theTax Collectorfor convenience, provided that proper notice is given. Proper notice for the purposes of this paragraph means at least 30 days’ written notification to the other party by certified or registered mail and, in the case where Airbnbis the party seeking to terminate the Agreement, at least 30 days e-mail notificationto each Hostoffering accommodations in the Countythrough Airbnb’s Platform that Airbnbwill no longer be collectingand remitting TDTfor Booking Transactions subject to this Agreement. Any termination under this paragraph shall not affect the duty of Airbnbto remit to the Tax CollectoranyTDTcollected from Guests up through and including the effective date of termination of this Agreement, even if not remitted by Airbnb to the Tax Collectoras of the date of termination. MISCELLANEOUS (R) CHOICE OF LAW. This Agreement, its constructionand any and all disputes arising out of or relating to it, shall be interpreted in accordance with the substantive laws of the State ofFloridawithout regard to its conflict of law principles.The Parties agree that any dispute arising out of or relating to this Agreement shall be heard exclusively in the in the courts located in the State of Floridaor the United States District Court for the SouthernDistrict of Florida and each Party consents to the exclusive jurisdiction of such courts and waives any and all objections to jurisdiction or venue in such courts or any assertion of inconvenient forum. (S)MERGER AND INTEGRATION. This Agreement containsthe entire agreement of the Parties with respect to the subject matter of this Agreement, and supersedesall prior negotiations, agreements and understandings with respect thereto. 7 CONFIDENTIAL 4EGOIX4K 5E (T)COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. The Agreement shall become effective when a counterpart has been signed by each Partyand delivered to the other Party, in its original form or by electronic mail, facsimile or other electronic means.The Parties hereby consent to the use of electronic signatures in connection with the execution of this Agreement, and further agree thatelectronic signatures to this Agreement shall be legally binding with the same force and effect as manually executed signatures. (U) CONFIDENTIALITY. . (i)The Tax Collectoragrees that, to the maximum extent permitted by law, both the terms of this Agreement, and all discussions and negotiations related to it and all information related to Airbnb as is described in §§ 213.053 and 213.0535,Fla. Stat. (2015) shall remain strictly confidential.The Tax Collectorcovenants and agrees that it will assume the same duties with respect to such information as is applicable to the Florida Department of Revenue with respect to information described in §213.053, Fla. Stat. (2015). The Tax Collector may disclose such information as is required to be disclosed pursuant to §§ 213.053 and 213.0535, Fla. Stat.(2015), but shall not make disclosures of information permitted by, but not required to be disclosed by such statutes. In the event of a mandatory disclosure of such information the Tax Collector agrees to provide advance written notice not less than tendays prior to any such disclosure to the attention of Airbnb’s General Counsel via e-mail (legal@airbnb.com). (ii)For the avoidance of doubt, any and all data provided to the Tax Collectorby Airbnb in furtherance of meeting its obligations assumed under this Agreement, including but not limited to data provided on tax returns and/or reports and data provided pursuant to an audit by the Tax Collector, shall not be shared with any other governmental agency, department or division of the County of Monroe or any other jurisdiction, including but not limited to federal, state or local, except for the purposes of enforcement of a tax obligation and only if such inter-agency sharing is required bylaw. 8 CONFIDENTIAL 4EGOIX4K 5E (iii)The Tax Collectoragrees that it will inform any and all relevant employees of this obligation and that it will instruct each to abide by the confidentiality provision contained in this Section (U). (V)RELATIONSHIP OF THE PARTIES. The Parties areindependent contractors.This Agreement does not create nor is it intended to create a partnership, franchise, joint venture, agency, fiduciary,or employment relationship between the Parties.There are no third-party beneficiaries to this Agreement. (W)WAIVER AND CUMULATIVE REMEDIES. No failure or delay by either Party in exercising any right under this Agreement shall constitute a waiver of that right or any other right.Other than as expressly stated herein, the remedies provided herein are in addition to, and not exclusive of, any other remedies of a Party at law or in equity. (X)FORCE MAJEURE.Neither Party shall be liable for any failure or delay in performance under this Agreement (other than for delay in the payment of money due and payable hereunder) for causes beyond that Party’s reasonable control and occurring without that Party’s fault or negligence, including, but not limited to, acts of God, acts of government, flood, fire, civil unrest, acts of terror, strikes or other labor problems (other than those involving Airbnb employees), computer attacks or malicious acts, such as attacks on or through the Internet, any Internet service provider, telecommunications or hosting facility.Dates by which performance obligations are scheduled to bemet will be extended for a period of time equal to the time lost due to any delay so caused. (Y) ASSIGNMENT.Neither Party may assign any of its rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of the other Party (which consent shall not be unreasonably withheld).Notwithstanding the foregoing, Airbnb may assign this Agreement in its entirety without consent of the other Party in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets provided the assignee has agreed to be bound by all of the terms of this Agreement and all past due fees are paid in full. Any attempt by a Party to assign its rights or obligations under this Agreement in breach of this section shall be void and of no effect.Subject to the foregoing, this Agreement shall bind and inure to the benefit of the Parties, their respective successors and permitted assigns. (Z) MISCELLANEOUS. If any provision of this Agreement is held by a court of 9 CONFIDENTIAL 4EGOIX4K 5E competent jurisdiction to be contrary to law, the provision shall be modified by the court and interpreted so as best to accomplish the objectives of the original provision to the fullest extent permitted by law, and the remaining provisions of this Agreement shall remain in effect. 10 CONFIDENTIAL 4EGOIX4K 5E NOTICES (AA)All notices under this Agreement shall be in writing and shall be deemed to have been given upon: (i) personal delivery; (ii) the third business day after first class mailing postage prepaid; or (iii) the second business day after sending by overnight mail or by facsimile with telephonic confirmation of receipt. Notices shall be addressed to the attention of the following persons, provided each Party may modify the authorized recipients by providing written notice to the other Party: To Airbnb: Airbnb, Inc. Attn: Deputy General Counsel th 888 Brannan Street, 4Floor San Francisco, CA 94103 Email: legal@airbnb.com With copy to: Airbnb, Inc. Attn: Global Head of Tax Tax Department th 888 Brannan Street, 4Floor San Francisco, CA 94103 Email: tax@airbnb.com To the Tax Collector: Monroe County Tax Collector Attn: Danise Henriquez P.O. Box 1129 Key West FL 33041-1129 Fax: TBD Email: TBD Signatures follow on next page () 11 CONFIDENTIAL 4EGOIX4K 5E IN WITNESS WHEREOF, Airbnband theTax Collectorhave executed this Agreement effective on the date set forth in the introductory clause. AIRBNB, INC. , a Delawarecorporation By:_______________________________________ Signature of Taxpayer or Authorized Representative Beth Adair, GlobalHead ofTax _______________________________________ Print Name and Title of Taxpayer or Authorized Representative THE TAX COLLECTOROFMONROE COUNTY, FLORIDA ______________________________________ 12 CONFIDENTIAL 4EGOIX4K