Local homeowners may soon be paying taxes and fees on the rooms they rent to travelers. Memphis City Council is expected to vote Tuesday on an ordinance that at least one government watchdog group is reviewing.
The proposed ordinance requires homeowners to pay $100 for a permit and pony up 3.5 percent of the room charge and $2.00 for each night of the rental. The tax and $2.00 fee are commonly passed along to guests.
These levies are the city’s response to a growing business commonly referred to as Airbnb. It allows residents to to rent out homes or rooms to travelers.
On Tuesday, Memphis City Council is expected to vote on a proposed ordinance that regulates the short- term rental industry in the Bluff City.
“We are worried that Memphis is going to start regulating Airbnbs to the extent that it is unconstitutional,” said Mark Cunningham from the government watchdog group called The Beacon Center. “Airbnbs are already treated unfairly because they have to pay the same taxes as hotels.”
Cunningham says taxes and fees that the city of Nashville assesses against Airbnbs benefit the hotel industry too much.
“While they pay the same taxes, hotels in Nashville are getting hundreds of millions of dollars from the state government,” Cunningham says.
The Beacon Center represents Airbnb hosts in a lawsuit against Nashville’s ordinance capping short-term rentals in each neighborhood.
The lawsuit claims placing limits about what a person does with their home is unconstitutional.
Those same limits do not appear on the face of the Memphis ordinance currently being considered.
“We are going to be ready to take a look at it from our legal department and if it is bad enough we would be willing to sue here as well,” Cunningham said.
The Beacon Center says it is reviewing all the specific language contained in the proposed ordinance.
