REPORT TO THE CITY COUNCIL FROM: GEORGEANNE A. WHITE, City Manager Office of the Mayor & City Manager RUTH F. QUINTO, CPA, Assistant City Manager Office of the Mayor & City Manager BY: SANTINO DANISI, MBA, City Controller/Finance Director Finance Department SUBJECT ..Title Actions pertaining to Transient Room Tax: 1. BILL- (For introduction) Amending Section 7-602 of the Fresno Municipal Code, relating to compelling short-term rental crowdsourcing entities such as Airbnb, VRBO, etc. to collect Transient Occupancy Tax (TOT) on the City's behalf and to remit the revenue to the City. ..Body RECOMMENDATION Staff recommends that City Council introduce the bill amending Section 7-602 of the Fresno Municipal Code, relating to compelling short-term rental crowdsourcing entities such as Airbnb, VRBO, etc. to collect TOT on the City's behalf and to remit the revenue to the City. EXECUTIVE SUMMARY This bill introduces language to address the definition of an "Operator" in Section 7-602 of the Fresno Municipal Code and provide clarity as to how this pertains to short-term rental crowdsourcing entities; thus, allowing the City of Fresno to require these entities to remit local taxes on behalf of short-term rental owners. The current definition of "Operator" does not include language to include instances where the operator may perform functions through a managing agent of any type other than an employee, such as a short-term rental crowdsourcing entity. BACKGROUND Transient Occupancy Tax (TOT) commenced January 1st, 2020 for all short-term rentals residing within city limits and the first short-term rental account in the City of Fresno opened in May 2020. At the start of the 2023 calendar year, there were 201 different short-term rental accounts belonging to 149 businesses. Since January 1st, 2020, the City of Fresno has collected $196,360 in TOT revenue. The City of Fresno requires all short-term rental operators to apply and register for a short-term rental permit if the operator rents space for 31 days or more in a year. The City of Fresno collects TOT revenue from these short-term rental operators only and the current municipal code does not hold short-term rental crowdfunding entities, the managing agent, responsible for collecting and remitting local taxes on behalf of the host. This bill introduces language to address this and deems the managing agent as an operator; thus, entitling short-term rental crowdfunding entities to the same duties and liabilities as the short-term rental host. As a result, revenues generated by TOT collected from short-term rental are anticipated to increase once Section 7-602 is amended. ENVIRONMENTAL FINDINGS Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378, this item is not a project for the purposes of CEQA. LOCAL PREFERENCE Local preference was not considered because this is an amendment to an existing agreement. FISCAL IMPACT There is no Fiscal Impact. Attachments: Ordinance