Avalara MyLodgeTax > Blog > State and Local News > Palm Springs residents to vote on measure restricting short-term rentals

Palm Springs residents to vote on measure restricting short-term rentals

  • Mar 31, 2018 | Jennifer Sokolowsky

On June 5, Palm Springs residents will vote on a ballot initiative that would ban short-term rentals in residential neighborhoods unless the owner is present. The measure would phase short-term rentals out of residential neighborhoods over a period of two years.

The City Council voted to place the measure on the June ballot after reviewing an independent impact report predicting dire economic consequences for the city if the ban on residential short-term rentals is enacted.

The report, compiled by international tourism consulting company Tourism Economics, states that the greater Palm Springs area could lose $199 million a year and up to 1,200 jobs due to reduced tourism if residential short-term rentals are banned.

Those figures were questioned by some City Council members as well as residents at a City Council meeting.

According to the report, the city’s 1,986 short-term rentals hosted approximately 467,000 visitors in 2017. Nearly 75 percent of the city’s short-term rentals are currently in R-1 zoned residential neighborhoods. They would be banned from those zones under the proposed law.

The city could lose $9.6 million annually in tax revenue alone if the measure becomes law, according to the report.

The impact report was ordered by the City Council in January, after a group called Neighbors for Neighborhoods submitted a petition with enough signatures to force a public vote on the issue.

The city’s current laws require short-term rental operators to register with the city as a vacation rental and obtain a transient occupancy tax permit. Short-term rental hosts in Palm Springs must collect transient occupancy tax of 11.5 percent on all bookings.

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.