Submitted By
Tammie Grossman, Director Development Customer Services
Reviewed By
LKS
Agenda Item Title
Title
A Resolution Approving a Voluntary Collection Agreement with Village of Oak Park Transient Occupancy Tax with Airbnb, Inc. and Authorizing its Execution
End
Overview
Overview
With the rise of private residential Transient Occupancy Rental Units, within the Village of Oak Park, significant competition with commercial Hotel/Motel establishments has developed. Recognizing that Transient Occupancy Rental Units function in the same capacity as traditional Hotel/Motel Units Amendments to Chapter 23A “Taxes” Article 4 “Hotel/Motel Tax” were approved which will assess a user tax of 4% on Transient Occupancy Rental Units.
Airbnb, as the host platform for third parties offering accomodations, has agreed to collect these taxes on behalf of The Village of Oak Park and remit directly to the Village all taxes collected.
Body
Staff Recommendation
Approve
Fiscal Impact
For every 100 Transient Occupancy Rental Units identified, staff estimates that the Village could realize a $40,000 increase in Hotel/Motel taxes annually. By ordinance these funds are to only be used for “the purpose of promoting tourism, meetings, conventions or other events within the Village or otherwise attracting nonresidents to visit the Village”.
Background
Oak Park’s proximity to the City of Chicago and our many cultural attractions make Oak Park a natural location for the establishment of Transient Occupancy Rental Units. In addition to cultural attractions and our natural geography Oak Park’s housing stock consisting of single and multi-family units contributes to this new reality. Staff estimates that over 100 Transient Occupancy Rental Units are currently offered in Oak Park. These “Units” consist of single rooms being offed in a residential home that is owner occupied, to non owner occupied apartments and homes.
Staff has worked closely with Airbnb to coordinate efforts to include The Village of Oak Park as one of many citys and jurisdictions for which Airbnb will collect occupancy taxes.
Per the Voluntary Collection Agreement, Airbnb will shall begin remitting all Transient Occupancy Taxes collected on the Village’s behalf at a time and manner described in Village Code or as otherwise agreed to in writing. The Ordinance has an effective date of January 1, 2017.
Alternatives
The Village Board could choose to not approve the Resolution.
Previous Board Action
First Reading of the Ordinance Amendments to Chapter 23A “Taxes” Article 4 “Hotel/Motel” was reviewed by the Board at the September 6, 2016’s regular meeting with no revisions requested.
Second Reading and Approval of Ordinance Amendments to Chapter 23A “Taxes, Article 4 “Hotel/Motel and Transient Occupancy Rental Unit Tax was provided at the September 19, 2016 Board Meeting.
Citizen Advisory Commission Action
The Business Association Council reviewed staff’s recommendations at their September 23, October 28, 2015 meetings and again on August 24, 2016 with no objections being put forward.
Anticipated Future Actions/Commitments
NA
Intergovernmental Cooperation Opportunities
NA
Performance Management (MAP) Alignment
A governance priority of the Development Customer Services Department is economic development.