Lake Tahoe house beach (Genaker/Shutterstock.com)

Data on short-term rentals helps county collect occupancy tax

Cloud-based technology is helping Placer County, Calif., ensure that operators of short-term rentals comply with a transient occupancy tax (TOT) that supports the local government services.

Placer has a policy requiring that operators register their units and remit a 10% TOT every quarter that they collect from guests. However, not everyone knows about or adheres to the requirement, said Doug Jastrow, the county’s revenue services manager. “We want to find people that are not complying so we can keep the playing field level,” Jastrow said.

Tourism is important to the area, which sits on Lake Tahoe’s north shore. In Placer, the number of short-term rentals grew from 2,602 in fiscal 2012-13 to almost 3,500 in fiscal 2017-18. Over that time, the total TOT short-term rental revenue was $48.8 million.

The county started using Deckard Technologies’ Rentalscape platform to identify, track and report short-term rental registrations, bookings and TOT payments in December 2020. The cloud-based platform --  Rentalscape is hosted by Amazon Web Services -- is accessible from anywhere. Users log in and access a dashboard or map view to see what properties are complying with the policy.

The application uses data from public sources such as parcel information, ads from short-term rental companies like Airbnb and VRBO and other data such as imagery from Google Street View. It ingests the data, standardizes it and then applies machine learning to determine matches and inconsistencies between the datasets.

Rentalscape, which updates the data daily, lets users like Jastrow see all of a property’s past and future bookings, how much TOT a property owner should have paid based on the available data, and whether it is TOT-certified. The printed and digital reports are in CSV, JSON and XLS formats that other applications can use for further analytics.

“We line up ownership parcels and records, we line up permits, we line up licenses,” Deckard CEO Nickolas Del Pego said. “We’re going through all of those rental ads and pulling down copies.… We’re comparing it to what government knows and doesn’t know.”

Because the technology can match an ad to the parcel data, it can provide exact addresses and owner contact data. With that, Jastrow and his team can notify operators who are out of compliance and request back taxes.

What’s more, revenue officials can identify potential gaps in tax remittance. For instance, someone may be paying the county $1,000 each quarter, but Rentalscape can show that the operator is bringing in more than $10,000 and should be paying more tax. Owners can dispute the Rentalscape numbers, but the system ensures Placer County does not have to rely solely on the honor system for TOT payments.

“Every single property that’s renting, whether they’re registered or not, has what I would call a property card,” Del Pego said. “It’s got all their pictures sitting there from their ad so that you can see them. It’s got links to the ads. It’s got links to the history of every scrape we’ve made of the ad ever. It’s got the calendar … so you can see when they’re taking bookings and not taking bookings.”

The county worked with Deckard to set up an online portal for landlords that walks them through the process for TOT certification and compliance and allows them to remit payments. “They’re able to do it securely,” Jastrow said. “There’s an email verification process, so no sensitive information is being provided to someone that isn’t associated with that property.”

Before using Rentalscape, the county’s revenue employees researched online platforms to try to identify addresses of rental units. But “with the online platforms, you’re never going to get an address until the property is booked so if you’re just browsing, you can’t see what a specific address is,” Jastrow said. “We didn’t have a competent ability to find those properties that were being advertised online.”

This tracking capability is particularly important as tourism picks up with the post-pandemic reopening. In 2019, a report found 90% of property owners were in compliance, but during the pandemic some landlords closed their TOT certificates because the governor and county health officer issued orders in April 2020 prohibiting commercial short-term rentals, Jastrow said. Before the pandemic, the county had issued about 5,000 TOT certificates, but that has fallen to 4,700, he added.

Despite that, the county’s short-term rental market is approaching the record numbers it reached in fiscal 2018-19. In April, it hit $3.4 million in bookings, compared to $3.6 million in April 2019.

About the Author

Stephanie Kanowitz is a freelance writer based in northern Virginia.

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