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Appeals court rules against Miami Beach vacation rental fines

  • Jul 28, 2020 | Jennifer Sokolowsky

Miami home with pool

A Florida appeals court has ruled against the city of Miami Beach in a case that challenged the city’s heavy fines for short-term rental law violations. The ruling by the Third District Court of Appeal upheld a previous court decision.

Miami Beach started levying its steep fines, which start at $20,000 and run up to a maximum of $100,000, in 2016. In 2018, the Goldwater Institute filed a lawsuit challenging the law on behalf of a Miami Beach short-term rental owner.

In October 2019, the Miami-Dade Circuit Court invalidated Miami Beach’s short-term rental law, based on the city’s fines for breaking the law. Florida state law bars local governments from fining residents more than $1,000 a day for code violations.

The court in the 2019 ruling said that the city’s fines were in “jarring conflict with [state law] and are therefore illegal and unenforceable.”

However, the city continued to enforce the law while it appealed the 2019 ruling. The city said it will also request a review of the latest ruling and seek a stay of the court order pending the outcome of that review.

“The City is disappointed by the court's ruling, and respectfully believes that it is mistaken. The City maintains that its short-term rental fines comply with all applicable laws, and intends to seek further review of the decision as permitted by the Court's rules. In the meantime, the City’s short term rental laws remain in full force and effect,” City Attorney Raul Aguila said in a statement. The city wants clarification on whether the invalidity of the fines makes the entire law invalid.

In a separate case, the Third District Court also recently ruled that the city cannot shut off water and sewer services to a property whose owner refused to pay short-term rental fines.

The court rulings come on the heels of a city shutdown of Miami Beach short-term rentals issued July 16 due to the COVID-19 pandemic. The order requires vacation rentals to cancel existing reservations and prohibits them from accepting new ones until the order is rescinded.

Florida Governor Ron DeSantis shut vacation rentals across the state down March 27 in response to the pandemic. Hotels, motels, inns, and other short-term accommodations were allowed to stay open. Starting in May, the governor allowed individual counties to apply for permission to reopen short-term rentals.

Miami Beach bans short-term rentals in residential neighborhoods and only allows them in a few areas. The city tripled the number of short-term rental investigations over the past five years and issued more than $8 million in fines.

Last year, Airbnb made an agreement with Miami Beach that makes it easier for the city to enforce its existing short-term rental law. Airbnb agreed to include city-issued business tax receipt numbers and resort tax registration certificate numbers on every Miami Beach listing.

Along with obtaining business and tax licenses, Miami Beach short-term rental operators are required to collect lodging taxes from guests for the city, Miami-Dade County, and the state.

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

MyLodgeTax can help short-term rental hosts automate and simplify lodging tax compliance at the city, county, and state level, including tax registration and filing. For more on short-term 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.

Learn more about FL lodging tax rules