As an ordinance regarding short-term rentals makes its way to the Jefferson City Council, the city's Finance Committee has decided property owners of those rentals should pay the city's lodging tax and get business licenses.
During Thursday's meeting, the committee voted to include in the proposed short-term rental ordinance that property owners renting out rooms pay the city's 7-percent lodging tax. The current city code states a property owner must pay lodging tax if he or she rents out three or more rooms.
The committee also voted that short-term rental property owners must receive business licenses regardless of how many rooms they rent out. Currently hotel and motel property owners must receive business licenses if they rent out six or more rooms, according to city code.
Along with this, the committee approved setting a minimum base for business licenses. City staff proposed property owners renting out rooms either pay a $12 minimum or $2 per room, whichever is higher. City code states property owners operating hotels, motels and bed-and-breakfasts must pay $2 per sleeping unit for their business licenses.
"For the motels, hotels (and bed-and-breakfasts) now, they won't change what their business licenses amounts are, but for anyone under six rooms that wasn't paying anything before will now have that $12 base," Jefferson City Finance Department Director Margie Mueller said.
Mueller said city staff will propose amending the city code to reflect these changes and will include them in the short-term rental ordinance proposal, to be presented to the City Council in December.
Diane Gillespie, Jefferson City Convention and Visitors Bureau executive director, said making the changes "levels the playing field."
"In the (hotel) industry, we have the understanding that the Airbnbs are here - they're not going away. So how do we make them a level playing field with the hotels?" she said. "If they were to have to get a business license and collect the taxes, that puts them on a level playing ground because they are a business, so they should have to get business licenses and do what businesses have to do."
Airbnb is among several websites that allow property owners to rent out residences or individual rooms.
Gillespie noted when short-term rental owners rent out their residences, it takes away from hotels and motels whose property owners pay the lodging tax, ultimately impacting the CVB's marketing funds used to promote Jefferson City.
Hotel occupancy in Jefferson City in September was 64.5 percent - up from 62.6 percent last year.
Last month, the Jefferson City Planning and Zoning Commission approved legalizing short-term rentals in the city. The city's zoning code currently prohibits residential property owners from renting out rooms in the city limits.
Under the proposed ordinance, a short-term rental is when a residential owner rents his or her entire home to someone for less than a month. A short-term rental of a lodging room is defined as a property owner renting out a single room or basement to an individual for less than a month. A lodging room short-term rental cannot have multiple rentals in the same residence.
The ordinance proposes short-term rentals be allowed in commercial zoning districts and mixed-use districts. In single-family, multi-family and industrial zoning districts, though, property owners would have to apply for a special exception use permit.
If the City Council passes the ordinance and code changes, Mueller said, property owners would need to receive a special exception use permit before applying for business licenses and paying lodging tax.
In the months leading up to the Aug. 21 solar eclipse, the CVB received calls from local property owners who wanted to rent out their homes, Gillespie said. While the CVB directed them to the city for more information on short-term rentals, she said, several property owners showed interest in paying lodging tax if it meant they could rent their homes out.
"I think several people who are in the Airbnbs and wanting to rent out their facilities would be willing to pay the taxes and do the business license," she said.
The city accumulated $112,835 from the lodging tax in September.
Since a lodging tax increase in 2011, the total 7 cents collected is more than $7.2 million, and 4-cent tourism fund has more $4.2 million.
Also during Thursday's meeting, committee members discussed the sales tax revenues for September.
The 1-percent city sales tax accumulated $615,667 in September - $69,026 less than projected.
The city gained $307,281 from the half-percent capital improvement tax - $104,657 less than projections. The half-percent parks sales tax gained $307,305 in September - $123,604 less than projected.
Mueller told the Finance Committee she does not know why those sales taxes came in below projections. The projections are based on a three-year average of the sales tax collection for that month, she added.
The general fund came in $19,877 over projections with $29,522,571 in September.