LANSING, Mich. (Michigan News Source) — A company best known for helping travelers book weekend getaways is now fighting a much less relaxing bill from the state of Michigan.
HomeAway—the Texas-based parent company of vacation rental platform Vrbo—has sued Michigan after a state tax audit concluded the company owes roughly $18.7 million in unpaid use taxes and interest tied to short-term rentals.
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The lawsuit, filed Dec. 18 in the Michigan Court of Claims, challenges a September assessment from the Department of Treasury covering tax years 2020 through 2022. State auditors say HomeAway failed to properly remit Michigan’s 6% use tax on certain bookings made through its platform.
HomeAway disputes that conclusion, arguing the responsibility lies with individual property owners, not the platform itself. According to the filing, any taxes collected from guests were passed directly to hosts, who were expected to send the money to the state.
“All funds representing use tax collected from guests were disbursed to the hosts,” the company said in court documents.
The disagreement hinges on how taxes were handled at checkout. Treasury officials contend HomeAway became responsible when hosts opted to have taxes added as a percentage of the booking price. HomeAway counters that it merely processed payments at the host’s direction and never kept the tax revenue.
The bill totals $15.1 million in use tax and $3.6 million in interest, with the largest share tied to 2021 and 2022.
For now, the question sits with the courts: who really owes Michigan its cut—the platform, or the people listing their homes?