Avalara MyLodgeTax > Blog > State & Local News > Palm Springs voters reject short-term rental ban

Palm Springs voters reject short-term rental ban

  • Jun 7, 2018 | Jennifer Sokolowsky

Palm Springs

Voters in Palm Springs, California, decisively defeated a ballot measure that would have phased out short-term rentals of single-family homes in the city over the next two years.

Measure C was opposed by Airbnb and Expedia, which owns HomeAway, and the two companies combined donated $300,000 to the campaign against it.

The City Council also opposed the measure, saying the ban would weaken the city’s tourism industry and simply force vacation rentals underground out of sight of regulation. Short-term rentals brought in $7.6 million to city coffers in 2017. 

The defeat of Measure C means that property owners offering short-term listings independently or on platforms such as Airbnb, VRBO, and HomeAway will be able to continue operating those properties — subject to the city’s strict regulations.

As of mid-May, there were 1,821 licensed short-term rentals in Palm Springs. According to Airbnb, 120,000 visitors stayed in Airbnb properties in the city last year, with hosts earning $29 million from their stays.

Short-term rentals in Palm Springs have been regulated since 2016, but the city introduced tougher rules in April.

The ordinance requires short-term rental operators to apply for a vacation rental permit. Homeowners are only allowed one permit and short-term rental operators caught renting without a permit are banned from getting a permit for life. Permit holders are allowed to host 36 guest stays per year, with four of those during the summer.

Palm Springs short-term rental permit holders must pay an annual $900 registration fee, which helps to fund the city’s nine-person compliance department. Annual safety inspections are also required and hosts must meet guests on arrival to explain the rules.

Short-term rental hosts in Palm Springs are also required to obtain a tax permit — the permit number must be posted on listing advertisements — and collect transient occupancy tax of 11.5 percent from their guests and pass the revenue on to the city.

While Airbnb collects lodging tax on behalf of its hosts in some nearby cities, including Coachella and Palm Desert, it does not collect lodging taxes for its hosts in Palm Springs. All Palm Springs operators are responsible for collecting the tax and remitting it to the city. MyLodgeTax is a management tool that hosts can use to help them take care of lodging taxes.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.