By Gregory B. Hladky
4:00 PM EST, December 27, 2012
Dozens of people in Connecticut are apparently taking part in an increasingly popular way for travelers to save money on hotels, while apartment-dwellers and homeowners who rent them a room or bed for a night or two make a little extra cash. These folks are all connecting on airbnb.com, a hugely popular website devoted to this whole Internet-Age concept.
The difficulty is that some or all of them may be breaking state tax laws as well as local zoning and housing safety ordinances.
In New Haven, for example, one airbnb participant is willing to rent you a room in a "Townhouse on the Yale Shuttle Route" for $49 a night. Sounds like a deal. And there are at least 13 other people in New Haven offering similar short-term rentals.
Except that, under New Haven's zoning ordinance, if a person stays less than a week in that townhouse room, the person owning or leasing that townhouse would need to be registered as a "commercial lodging establishment."
Not registered but renting out that couch or extra bedroom for less than a week? Well, you may be in violation, says Tom Talbot, deputy director of zoning in the city's planning office.
"It gets a little complicated," he points out, depending on a variety of factors.
Talbot says you could be in lawful New Haven territory if you're re-renting your entire apartment out for a few days. "I don't believe there are any restrictions on that," he says.
Of course, there are state and local zoning, housing and fire safety codes covering stuff like renting out rooms on a short-term basis, which makes it very hard to pin down where this might be legal or illegal.
In New York City, some people who have rented out bedrooms in their apartments to travelers have been hit with thousands of dollars in fines, according to a recent New York Times article.
Meanwhile, Connecticut officials responsible for collecting sales and occupancy taxes from hotels, motels and B & Bs are scratching their heads over the whole airbnb concept. "The first time we heard of it was when you called," state Department of Revenue Services spokeswoman Sarah Kaufman says.
Kaufman says the tax agency's legal staff can find no record of any Connecticut resident connected to the airbnb website registered with the state for sales and occupancy tax purposes.
She says Connecticut tax honchos have a whole bunch of questions concerning these airbnb rentals. "Is this something they're doing once and never again? Are they doing it intermittently? Are they doing it on a regular basis?" Kaufman asks.
"They're researching it right now," she says of the agency's legal bloodhounds. Kaufman, like Talbot, says no one in Connecticut has made any complaints of illegal or tax-dodging rentals that officials know about.
Ginny Kozlowski, executive director of the Connecticut Lodging Association, says she's convinced that state law here requires "anyone renting out a room to transient guests to register with the state Department of Revenue Services for the occupancy tax."
Connecticut's occupancy tax amounts to 15 percent of the cost of a room. So whoever is renting out that $49 per night townhouse gig in New Haven is supposed to be forking over $7.35 to the state.
Airbnb boasts of 200,000 rental listings around the world, many in cities like New York, New Orleans, Paris and London that have strict regulations about these sorts of operations. But the operators of the website, which takes a small cut of every rental payment and appears to be making lots and lots of money these days, have protected themselves by requiring all would-be participants to obey all local and state laws and ordinances.
Kozlowski says the hotels, motels, inns and bed-and-breakfasts that make up her association's membership are well aware of the airbnb controversy.
"It's definitely generating a lot of conversation," she says, "particularly around safety." Kozlowski says there are concerns that some of these rooms or apartments may not have the kinds of smoke and CO2 detectors and alarms that regular hotels and motels are required to install.
The potential for competition is also worrying some of Connecticut's commercial operations.
"I think it's a concern of some smaller B & Bs," according to Kozlowski. "We certainly want to make sure everybody's playing by the same set of rules."
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