City of Rome

An occupancy tax bill introduced in the Georgia legislature to include rental accommodations such as Airbnbs led the City of Rome to withdraw its federal class-action lawsuit against Airbnb — at least for now.

City Attorney Andy Davis confirmed Wednesday he filed a voluntary dismissal Tuesday of the $5 million suit the city had filed jointly with Cartersville, Tybee Island and Hart County at the end of January.

“There is House Bill 448 pending in the legislature ... at this point we thought we would give the legislation the opportunity to work its way through and see how that might develop,” Davis said.

The city sued Airbnb in order to force the San Francisco-based company to comply with tax laws requiring the collection and remittance to the city monies the business calls a “service fee.”

HB 448, currently pending in the House Rules committee, would amend the definition of “innkeeper” and require “lodging facilitators” such as Airbnb and VRBOs to pay the hotel/motel tax currently being collected from traditional accommodation facilities.

Although Davis wouldn’t say how much money he believes the city is missing out on from Airbnb properties, he said that on any given weekend, there are at least 50 Rome residents renting out rooms in their homes.

So far, the city hasn’t been paid anything for those rentals, despite the fact that Airbnb charges fees to both the homeowner and their guests.

Rome has an 8% hotel/motel excise tax. Its ordinance defines “hotel” to mean “any structure or any portion of a structure including any lodginghouse, roominghouse, dormitory, Turkish bath, bachelor hotel, studio hotel, motel, motor hotel, auto court, inn, public club or private club containing guestrooms.”

According to the lawsuit, the plaintiffs have been demanding the taxes from Airbnb for the past five years, but the company has failed to respond.

“Defendants engage in deceptive, unlawful, unfair, and fraudulent business acts and practices by misrepresenting to consumers and owners that Defendants are displaying and collecting Occupancy Taxes, which in fact Defendants do not display or collect,” the suit claims.

Davis said a similar bill to HB 448 was introduced last year, but did not get traction. He said this time it’s at least moving through committees.

If the legislation does not make it to law, the class-action suit can be refiled, Davis said.

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