A bill establishing a structure for Airbnb in Virginia, which was opposed by all three local governments in the Historic Triangle, squeaked through the Senate on 20-19 vote Tuesday afternoon.
The bill sets up a structure though which Airbnb can collect the taxes owed to the state and localities by homeowners who use their web platform to rent out rooms in their homes.
SB 416, sponsored by Sen. Jill Holtzman-Vogel, R- Fauquier, was extensively debated, with more than a dozen senators joining in a struggle that created unlikely alliances. At one point Senate Minority Leader Dick Saslaw, D-Fairfax, was followed on the floor by Sen. Dick Black, R-Loudoun, one the Senate's most conservative members. Similarly, Senate Majority Leader Tommy Norment, R-James City, found unlikely allies in Sen. John Edwards, D-Roanoke, and Sen. Chap Petersen, D-Fairfax, in opposition to the bill.
The bill established a system for Airbnb to collect and remit the taxes owed to the Virginia Department of Taxation, which would reimburse localities their share. The bill says Airbnb "may" register with the Department of Taxation in order to accomplish this. Norment's amendments changed the word "may" to "shall."
"If we want to make sure that the taxes are collected I think we need to require them to register," Norment said, noting that Philadelphia requires the registration.
"I would like to be able to accept this floor amendment," Holtzman-Vogel replied."But I'm told that it's unconstitutional. Airbnb isn't the one who owes the taxes, the homeowners are the tax payers. We cannot require that a third-party register and accept responsibility for taxes that they don't owe."
She said Airbnb is already in the state.
"The sharing economy is here, we might as well embrace it," she said.
Both Peterson and Edwards compared the bill to last year's bills regulating the ride sharing companies Uber and Lyft.
"This bill is not ready for prime time," Edwards said. "We need to study this carefully, the way we did with the Uber and Lyft legislation."
Petersen said he represents taxi cab companies as a lawyer.
"They were put at a competitive disadvantage, now you are putting hotels and bed and breakfasts at a disadvantage of competing with a non-regulated business," he said.
But, Norment said, bed and breakfasts in Virginia are regulated.
He said the current version of Holtzman-Vogel's bill doesn't regulate how many people could stay in a rental room.
"Localities will still be able to regulate that," Holtzman-Vogel said."They can regulate how many people stay, they can regulate parking."
But Norment said a provision in the bill invalidates any local ordinances that are in conflict with it.
Sen. Bill DeSteph, R-Virginia Beach, raised another prospect.
"It allows anyone to stay anonymously anywhere they want," he said. "It allows people to stay 50 feet from a school zone who might not be allowed to be within 500 feet or a mile of a school zone."
He also raised the possibility of homeowners dispensing alcohol to their guess without an ABC license.
"So you've brought in everyone from sexual predators to drunks, the only ones you left out were terrorists," Saslaw said. "This is an overnight stay, it's not the end of the world. There is no reason in the world we need to study this."
"I can't believe that we don't think this small, free enterprise can't get by without guidance from us," he said. "I expect that we will see this again for the next two or three years and we'll tweak it. But let's let the business get started before we try to regulate it."
While he didn't speak on the bill, greater Williamsburg's other senator, Sen. John Miller, D-Newport News, also voted against it.
The House of Delegates has already passed it's own version of the Airbnb legislation, HB 812, sponsored by Del. Christopher Peace, R-Mechanicsville, on a 75-22 vote.
Williamsburg signaled it's opposition to the legislation early in the General Assembly session, sending letters to Norment, House Speaker Bill Howell, R-Stafford, and Gov. Terry McAuliffe.
The Historic Triangle's localites were far from alone.
"There isn't one locality in this state that supports this piece of legislation," Norment said. "I don't have an illusion that anything I say here is going to change any votes. But you all should read this bill. It's going to have tremendous unintended consequences.
Reach Vaughan at 757-345-2343.