Bonavista cuts off services for Airbnb operators with unpaid business tax bills

A Newfoundland town is getting tougher in its attempts to collect taxes from Airbnb rentalspopping up in the popular tourist destination.

The mayor said Bonavista is taxing Airbnbproperty ownersat the town'sbusiness rate, using properties' assessed values, to create a level playing field withowners of accommodations thatare registered as businesses.

"They are not registered businessesso it's kind of hard to go after them when you don't know their revenue and the value of their business, so we have had to come up with our own formula," said John Norman.

We have gone to some pretty serious measures to collect.- John Norman

"We assign the business mill rate, like we do with any other business without knowing the actual revenue."

It appears to be afirst for Airbnb, whichsays it is not aware of any other municipality in Canadathat is taxing Airbnb hosts as a business based on their property assessment value.

Norman said there is a town staff member who monitors Airbnbconsistentlylooking for new accommodations. When there are new listings,the information isrecorded and astaff member will make a house visit.

"We have gone to some pretty serious measures to collect. We have literally dug up driveways and turned off water sewer service until the bill is paid, cutting them off completely from all municipal services."

The mayor saidthe taxation method has been successful, but he acknowledgesnot all Airbnb owners are pleased.

"I don't think some are happy about it, but it is what it is."

Airbnbproperty owners don't pay Canada Select Fees, site inspection fees for Service NL or provincial tourism registration fees, according to Norman, which he saysis part of the reason owners of more traditional accommodations are upset.

Unfair advantage, says bed and breakfast owner

Patrick Alan Monsigneur,co-owner of theCladdagh Inn, a Saint Mary's bed and breakfast, says they've had a significant decline in clientele since Airbnb rentalsstarted popping up in the area.

He said he's in favour of healthy competition, but believes there'san unfair disadvantage.

"We are no longer on an even playing field because the competitors aren't paying taxes, and paying all the fees and meeting all the requirements," he said.

"We collect taxes for the government. Unregistered and unlicensed operations are not collecting those taxes."

Airbnbsays homes are not hotels

An Airbnbspokesperson told CBC the province is home to many operators trying to make ends meet.

"Airbnb believes in paying its fair share, but given the casual nature of home sharing, our hosts should not be treated like corporate hotels.We already work with the Canada Revenue Agency to remind hosts across the country of their obligations during tax season," said Alexandra Daggin a statement.

The company said it is not aware of any other Canadian municipality that is taxing Airbnb hosts asbusinesses based on their property assessment value.

More regulations needed

The lack of regulations on Airbnbproperties also concerns Larry Laite, chair of Hospitality Newfoundland and Labrador.

There are no health inspections, orinspections done by fire departments or service NL.

"It's something that we have asked that there be a legislative review done and completed on the tourism establishment act so that they can be regulated and legislated," said Laite.

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He wants Airbnb properties to undergo health and fire inspections, and other scrutiny that licensed businesses encounter.

"Without having those regulations and that comfort zone we are concerned that this can damage the work that has taken place over the last 25 years to build Newfoundland into a destination that people want to come to."

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