NEW BRAUNFELS, Texas - The cost of staying in a short-term rental like an Airbnb in New Braunfels has doubled in the last four years. What may sound like good news actually has a negative side to it.
- New Braunfels leaders say city missing out on millions in tax revenue
- Short-term renters said to be paying state taxes but failing to pay city taxes
- Renters said to be failing to cater to the New Braunfels workforce
New Braunfels Chamber of Commerce President Michael Meek said short-term rental property owners like Airbnb hosts are skipping out on paying hotel occupancy taxes to the city.
"They need to pay the taxes that are owed. All we're asking for is a level playing field," Meek said.
He said the city is missing out on between $700,000 to $1.2 million annually due to this tax evasion.
"We're seeing less funds for our arts and heritage groups. We see less funds for our Civic/Convention Center, and we'll see less funding for our tourism/promotional account," Meek said.
New Braunfels is known for drawing tourism to Wurstfest, Schlitterbahn, and the Comal River. Judy Young with the Visitors Bureau is hoping to educate property owners on the tax requirements.
"I just think it's a lot of, 'I'm doing the state thing, why would I have to do anything else?' So they're thinking in their mind they just do it one place and it's taken care of and then the state remits it back to the city. That's not the case with this kind of tax," Young said.
Airbnb is automatically remitting money back to the state through the hotel occupancy tax and an agreement with the Texas Comptroller from May 2017.
Meek said he's working with state and city representatives on creating legislation that would guarantee the city receives its designated HOT tax.
"It would've been nice if when the state cut the deal with companies like Airbnb to get state occupancy taxes paid, that they would've included the local taxes as well," Meek said. "Ultimately, it's the owner of the property by state law is supposed to be paying these occupancy taxes and following other ordinances in the city that they abide in. So it's going to be evidently put upon the cities and city governments to try and solve this."
According Meek and Young, around 80 percent of short-term rental hosts that have more than one property listed for rental, leading them to say these hosts are entrepreneurs and businesspeople that should know there's requirements that need to be met.
"They know how to run a business, they know that there's permitting and safety measures and taxes that have to be paid," Young said. "Right now they're just kind of skating because it's really easy and it's a new and emerging economy and so there's always going to be an evolution in that process.
On top of the city losing out on millions, Meek said property owners are choosing to rent out to short-term rental customers, instead of the workforce that needs a place to live, adding to the already strained workforce housing issue.
"It's worse here," Meek said, "but it's all over the country that this is occurring, and everybody just now is waking up to 'Gee, what do we do about this?'"
The next step for New Braunfels is to hire an outside company to hold property owners accountable for paying local HOT taxes and being compliant with city ordinances.