Jon Stinchcomb Port Clinton News Herald
As the ever-changing technological landscape in the smartphone era has allowed more in the private sector take advantage of the tourism opportunities the region offers, officials in Port Clinton are hoping the city can adapt.
While the continually growing abundance of online marketplaces has often made things easier for both consumers and vendors, it has made at least one aspect within the public sector harder: tax collection.
In Port Clinton, online services offering vacation rentals, such as Airbnb, have been making it increasingly difficult for the city to adequately collect its local bed tax.
Airbnb is one of the most popular online marketplaces specializing in vacation rentals, and is ranked third in the travel category of the Apple App Store, behind only Uber and Lyft, two ride-sharing services.
Users can list or find vacation properties, primarily “bed and breakfast” home stays, and book lodging arrangements entirely through the app on their phones.
However, a problem for the city arises when the bookings for properties within the municipality of Port Clinton are not registered and property owners fail to pay the legally required local transient occupancy tax.
The power to levy a local transient occupancy tax also is permitted and regulated by state law in Ohio.
In Port Clinton, the bed tax is 3% on all rents for lodging furnished to transient guests, meaning travelers.
The city’s bed tax was established via ordinance in 1985 and was last updated in 2005, but Law Director Dina Shenker the ordinances are being reviewed and likely will be updated again, particularly as it relates to collection.
“We learned this past year, with regards to attempting to collect, there are some loopholes and things that people are trying to use to get out of paying,” she said. “So we’re hopefully going to clear up those ordinances.”
Shenker said Port Clinton Mayor Mike Snider’s office has been working hard to tackle the issue regarding bed tax delinquency within the city from bookings made through online marketplaces.
As it stands, Snider said there are only about 33 properties using online travel agencies that have registered with the city as required to pay bed taxes.
But Snider referenced an estimate recently demonstrated to city officials that uses software designed to more closely track listings on the online marketplaces. It found more than 250 properties listed within the city that potentially owe bed taxes if booked and hosting travelers.
Snider works with vacation rentals in Port Clinton for a living, but said even he would have a hard time tracking down every single listing within the city on the various online and mobile platforms.
Snider said county officials in both Ottawa and Erie have taken a look into the issue, and said there have been discussions about potentially partnering with local municipalities in the effort to tackle it.
“That whole framework is still yet to be determined,” he said. “But, whatever is found in Ottawa County is certainly going to fall within a political subdivision, so we can share information.”
The city is planning to meet with county officials later this month via Zoom.