New bills co-sponsored by one of northern Michigan’s legislators could change the way hospitality properties are taxed, opening the door for more tourism revenues to be spent on things like infrastructure and emergency services. The bill even has the backing of Airbnb, which has not historically participated in the lodging assessment systems that fund organizations like Traverse City Tourism. And while State Representative John Roth (R-Interlochen) tells The Ticker the legislation is unlikely to pass in its current form, he says it’s already igniting conversations at the state level about more equitable tourism revenue sharing.

Introduced in the Michigan House of Representatives last month, the package of legislation – House Bills 5138, 5139, and 5140 – would “help tourist-heavy areas offset the additional cost of hosting visitors by giving them the ability to apply a modest, voter-approved, 3 percent tax on short-term accommodations such as hotels, motels, and homestays like Airbnbs to help fund essential services,” according to a press release from Representative Mark Tisdel (R-Rochester Hills). Tisdel is the sponsor of the flagship bill (no. 5140) which would let “counties and local units of government” opt into the 3 percent excise tax.

“Local communities incur expenses when hosting visitors,” Tisdel said of the bill. “This is about making sure that people who are benefiting from services are the ones paying for it."

House bills 5138 and 5139, sponsored by Rep Donovan McKinney (D-Detroit) and Rep. Roth, respectively, “would require online booking platforms to collect the tax from customers at the point-of-sale on behalf of the state and local government.” That money “would then get distributed to local governments to cover expenses of essential services.”

Roth says he’s been “hearing more and more” from constituents about the desire to see more tax dollars from tourism. In Traverse City, Bradford Lystra and Andrea Stalf spent the year raising the issue by way of local petitions and resolutions, actions Roth says do help move the needle in Lansing. While Roth doesn’t expect this trio of bills to pass, he’s hopeful they will at least push the conversation forward.

“I really consider these bills vehicle bills,” Roth explains. “I don't know that they'll end up going through, but I really think they’ve restarted the conversation. The restaurants, the lodging industry, the convention-and-visitors bureaus (CVBs), the Michigan Township Association, the Michigan Municipal League – they’re all talking again. And I think there’s recognition…that some of these funds need to go back to the local governments to help take care of infrastructure – whether that be sewers, fire, or inspections of short-term rentals.”

Roth and his co-sponsors have a somewhat unlikely ally in their efforts: Airbnb. Last month, just days after the bills were introduced, the company posted a full-throated endorsement of the legislation, touting the potential for the new tax to “generate more than $20 million annually for Michigan local governments to fund critical public services.” That post included supportive statements from multiple leaders from throughout the state, including Traverse City Mayor Amy Shamroe.

“Airbnb supports fair and balanced short-term rental (STR) rules that let every Michigan community benefit from travel, and that is what this proposal is about,” Airbnb Policy Manager John LoPorto tells The Ticker. “It gives local governments and residents the choice to collect an accommodation fee so that travelers contribute their fair share to local services and infrastructure. With broad support from cities and towns across the state, it’s a smart and flexible way to strengthen tourism and reinvest in communities.”

Trevor Tkach – president and CEO of the local CVB, Traverse City Tourism (TCT) – is rankled by Airbnb’s involvement. As is, TCT collects a 5 percent assessment from local lodging providers that have more than 10 units, including a mix of hotels, motels, B&Bs, and STRs. Those dollars then fund the majority of the organization’s budget, including employee salaries, TCT-hosted events, and tourism promotion. According to Tkach, Airbnb has historically refused to play ball with the laws that govern Michigan’s CVB assessments. In other words, he says, most of northern Michigan’s thousands of STRs benefit from TCT’s promotional work without helping pay for it.

“Platforms like Airbnb – and the STR owners they represent – have been the beneficiaries of a longstanding system that supports Michigan’s visitor economy,” Tkach said in a written statement. “Rather than helping ensure that their members are fully compliant with the existing system and paying their fair share, Airbnb has created a distraction by introducing an entirely different plan. If implemented, their plan would raise taxes on business owners who have been playing by the rules all along, while undermining the very framework the industry relies on. It also fails to acknowledge the importance of consumer protection, allowing many STRs to continue bypassing the safety standards, licensing requirements, and regulations that traditional lodging providers must uphold.”

Lystra and Stalf are appreciative of the bills, but see room for improvement by pushing for a true equal playing field between hotels and STRs.

“We would suggest a new version of this bill that assesses a 5 percent flat tax on all hotels and STR stays less than 30 days, and have it go to the ballot by county,” the pair wrote in a joint statement provided to The Ticker. “If approved, half the proceeds would go to tourism and the other half to the county, which will apportion to the City of Traverse City for infrastructure. Locally, by including STRs in Grand Traverse County [in the bill], tax revenues will be significantly larger than current, so even with half, we estimate TCT remains robustly funded and growing at an annual rate.”