In Wisconsin, Air BnB's helping, but big-box retailers are taking

Because I am a budget and policy geek, this little bit of data raised my eyebrows.

Taxes collected by Airbnb for the first three months under an agreement with the state of Wisconsin has far exceeded expectations, company officials said.

Airbnb sent about $550,000 in tax revenue for July, August and September to the Wisconsin Department of Revenue, a number Airbnb said "dwarfed even the most aggressive initial projections."

When the deal with the state was announced in June, the Department of Revenue said if the agreement had been in place for all of 2016, the state would have gotten about $700,000.

The agreement calls for Airbnb to collect sales taxes, use taxes and local resort/exposition taxes on behalf of the home owners in the Airbnb system.

Which puts an interesting light onto the 1st Quarter of Wisconsin State Revenues for Fiscal Year 2018, which was released last Friday. The topline numbers were a bit below projections, although not enough to be alarmed about (yet), but sales taxes were only up 1.6% even with the bump in Air BnB remissions.

Granted, we’re only talking about $375,000 extra or so out of $884 million in sales taxes for those three months, but it does underscore consumer weakness in other parts of the state’s economy. And we didn’t have the hurricanes to hold back spending like there was in other segments of America in those months. Could be worth keeping an eye on.

Another item to keep an eye on is how Wisconsin businesses are increasingly able to get favorable court decisions on property assessments, which will likely mean higher taxes for homeowners. Lou Kaye at Rock Netroots has a good list of nearly $850,000 that has been paid back so far this year in Janesville (including a combined $730,000 to Blain’s Farm and Fleet and Menard’s). And as a Madison homeowner, seeing this story today didn’t make me feel great.

After getting new information, Madison is cutting millions of dollars — and in five cases, more than $10 million — from the assessments of hotels that saw huge increases in property values this year.

After initial assessments were announced in April, city officials had said hotels and big apartment buildings had been undervalued and that increases were appropriate and warranted….

The latest changes will add $9.67 to the tax bill for the average home for next year, bringing the increase to $75.60 and the total bill to $2,493.19. Madison’s average home is valued at $269,377. The city’s Finance Committee approved a $314.3 million operating budget on Monday, and the City Council will make final budget decisions the week of Nov. 13….

Overall, “it shows we were on the right track,” city assessor Mark Hanson said. “We knew this class of property needed some adjustment. They hadn’t been looked at since the recession.”

The hotel assessments initially came in far too high because assessors had to rely on assumptions based on available occupancy and room rates and didn’t have actual income and expense information, Hanson said. In the appeal process, hotels provided actual data, he said.

In all, 26 hotels got a total of $97 million knocked off of their assessments, and that means that homeowners make up more of the total tax base, which is why I’ll be paying that extra $10. It helps when you’re a company with big dollars, and the ability to have the time, effort and money to get information to lawyers who can make the City back down and lower your bill.

Which led me back to wondering where the State Legislature was in discussing the “dark store” bill that has been introduced in both houses with numerous sponsors from both parties. This legislation would keep companies like Menard’s and Farm and Fleet from having their property taxes drastically lowered by basing their assessed values on empty stores instead of the active ones in use, and keep homeowners from getting jacked in the process.


Huh, doesn't look empty.

I’m glad to report that the Senate bill for dark stores made it unanimously out of committee earlier this month, and is ready to be voted on by the full Senate. The Assembly dark store bill has had a hearing, but is currently languishing in the Ways and Means Committee - aka the “WMC” Committee. Ironically, Wisconsin Manufacturers and Commerce is actually trying to stop the dark store legislation, apparently because they lack any shame in their greed. And the WMC angle is what makes me wonder if that’s what has kept this bill from a final vote in Robbin’ Vos’s Assembly.

Both the air BnB tax and the dark store bills may seem like small little accounting measures, but they are intriguing changes in policy and they could result in significant impacts on our fiscal situation. It’ll be worth keeping an eye on it as we go into property tax season, and as we get a better idea about what fiscal year 2018 is going to look like.