Avalara MyLodgeTax > Blog > State and Local News > Judge strikes down Miami Beach short-term rental law

Judge strikes down Miami Beach short-term rental law

  • Oct 15, 2019 | Jennifer Sokolowsky

Miami Beach condo

A Miami-Dade circuit court judge has invalidated Miami Beach’s short-term rental law, based on the fines of $20,000 or more that the city imposes for breaking the law. However, the city has appealed the ruling. Until an appellate court rules on the case, the law is still in effect and the city plans to enforce it.

Miami Beach started levying its steep fines, which start at $20,000 and run up to a maximum of $100,000, in 2016 in an effort to deter illegal short-term rentals. Last year, the Goldwater Institute filed a lawsuit challenging the law on behalf of Miami Beach short-term rental operator Natalie Nichols.

Judge Michael Hanzman ruled that the city’s fines are in “jarring conflict with [state law] and are therefore illegal and unenforceable.” Local governments may not fine residents more than $1,000 a day for code violations, according to Florida state law.

While the judge’s ruling focused on the fines, he struck down the whole law. If his ruling stands, it could be difficult for the city to regulate short-term rentals. The state Legislature made it illegal for cities to create their own vacation rental rules in 2011. Those cities with rules already on the books, like Miami Beach, were exempted, but Miami Beach may not be able to pass a new law.

Miami Beach bans short-term rentals in residential neighborhoods and only allows them in a few areas. While about 4,500 Miami Beach vacation rentals are advertised on Airbnb, fewer than 1,000 short-term rentals are registered with the city. The city has tripled the number of short-term rental investigations over the past five years and issued approximately $8 million in fines. As of June, Miami Beach had only collected around $500,000 of that amount.

Airbnb recently made an agreement with Miami Beach that makes it easier for the city to enforce its existing short-term rental law. As part of a lawsuit settlement, Airbnb must include city-issued business tax receipt numbers and resort tax registration certificate numbers on every Miami Beach listing.

The city recently announced that short-term rental hosts who provide false business license numbers in advertisements can face criminal prosecution, with penalties of up to 60 days of jail time and/or a $500 fine.

Along with obtaining business and tax licenses, Miami Beach vacation rental hosts are required to collect lodging taxes from guests for the city, Miami-Dade County, and the state, then pass them on to tax authorities.

Airbnb and Vrbo collect state and Miami-Dade County lodging taxes on behalf of their hosts, but they do not collect Miami Beach city taxes, so hosts are responsible for taking care of those themselves.

MyLodgeTax can help vacation rental hosts automate and simplify lodging tax compliance at the city, county, and state level, including tax registration and filing. For more on vacation rental lodging taxes in Florida, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.    

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.