CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
8/11/2025
1 SUBJECT:
Resolution authorizing execution of a Voluntary Collection Agreement (VCA) between the City of Pacifica and HomeAway.com, Inc, for the collection of Transient Occupancy Tax (TOT) and Pacifica Tourism Management District (PTMD) Assessments.
RECOMMENDED ACTION:
Adopt the attached resolution approving the Voluntary Collection Agreement (VCA) between the City of Pacifica and HomeAway.com, Inc, at no cost to the City, for the collection and remittance of Transient Occupancy Tax (TOT) and Pacifica Tourism and Marketing District (PTMD) assessments on short-term rentals through a VRBO hosting platform and authorize the City Manager to execute the Agreement and any necessary amendments.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
(650) 501-6004
[email protected]
SUMMARY:
This report recommends approval of a Voluntary Collection Agreement (VCA) with HomeAway.com, Inc, which operates VRBO and its affiliated platforms. The agreement will allow the City to capture unreported Transient Occupancy Tax (TOT) revenue from short-term rentals through the VRBO platform. While Airbnb has been collecting and remitting TOT on behalf of its hosts under a VCA, the City does not currently have a similar agreement in place with VRBO, Airbnb’s largest competitor in the short-term rental (STR) market. This has resulted in a significant gap in automated revenue collection and compliance enforcement.
In addition to the City’s existing agreement with Airbnb approved in 2018, executing a similar agreement with HomeAway.com, Inc. would help the City in capturing a large portion of any remaining TOT remittances where hosts have collected but failed to remit TOT to the City.
Closing this compliance gap is especially important ahead of the implementation of the City’s new STR ordinance in October 2025.
DISCUSSION:
HomeAway is a corporation that operates an online platform connecting individuals seeking to rent accommodations (“hosts”) with individuals looking to book accommodations (“guests”). The platform enables these parties to locate each other, communicate, negotiate, and complete bookings directly.
For the purposes of this Voluntary Collection Agreement (VCA), HomeAway agrees to serve as a limited collection and remittance agent on behalf of hosts who offer or rent accommodations within the City of Pacifica through the VRBO platform. Upon the effective date of the finalized Pacifica City Council 2
August 11, 2025
VCA, HomeAway will assume responsibility for the collection and remittance of the City’s Transient Occupancy Tax (TOT) and PTMD assessments for all applicable transactions facilitated through its platform.
While the City executed a similar VCA with Airbnb in 2018 to streamline TOT collection, no such agreement has previously existed with VRBO, which has grown into a significant STR platform over the last several years.
The attached VCA provides a formal structure for the platform to collect and remit TOT and PTMD assessments directly to the City on behalf of hosts using its services. Key provisions of the agreement include the following:
• TOT Collection Scope: VRBO will collect TOT at the full rate (currently 15%) and the Pacifica Tourism Management District (PTMD) assessment on the full amount charged by the host for accommodations within Pacifica, including rental fees, cleaning fees, and other use-related charges, excluding refundable deposits and VRBO’s own service fee. • Effective Date and Remittance: VRBO will begin collecting and remitting TOT on booking transactions commencing on October 1, 2025, in alignment with the effective date of the City’s new STR ordinance.
• Data Confidentiality and Audit Access: While the City retains its audit rights, VRBO will not provide individual guest or host names except via a lawfully issued subpoena.
Property-level data and transaction-level detail (by reservation ID) will be made available upon formal request in the context of an audit.
• Prospective Liability Only: The agreement is prospective in nature and does not allow the City to pursue back taxes, assessments, or claims against the platform regarding bookings made prior to the effective date. However, the City’s engagement with HdL enables continued efforts to identify and recover past-due revenues directly from STR operators within applicable statutory limits.
• City Cooperation: The City will confirm jurisdictional boundaries with VRBO’s thirdparty tax content provider and assist in responding to host and public inquiries regarding the platform’s collection and remittance process under the agreement.
The agreement also requires VRBO to provide regular summary reports and comply with applicable recordkeeping provisions to support the City’s audit rights.
Execution of this agreement represents a significant step toward ensuring equitable and comprehensive tax compliance across all major STR platforms operating in Pacifica, supporting the City's fiscal sustainability and tourism funding goals.
ALTERNATIVE ACTION:
Do not approve the agreement. This would maintain the current gap in TOT collection from VRBO-hosted short-term rentals, potentially resulting in continued revenue loss and regulatory inequity compared to other platforms like Airbnb.
FISCAL IMPACT:
Pacifica City Council 3
August 11, 2025
Execution of this agreement may not result in a visible increase in Transient Occupancy Tax (TOT) revenue, as it is scheduled to take effect concurrently with the implementation of the City’s new Short-Term Rental (STR) Ordinance in October 2025. The new ordinance will initially apply only in the non-coastal zone and is expected to significantly reduce STR activity due to stricter regulatory requirements, which will prevent many existing operators from qualifying for permit renewal.
However, the agreement will help offset projected TOT revenue losses by ensuring automated and more accurate tax reporting from VRBO-hosted rentals. It will also reduce the administrative burden on City staff, close a longstanding compliance gap, and enhance the City’s ability to monitor STR activity and enforce collection requirements moving forward.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Attachment A: VRBO Voluntary Agreeement(PDF)
Pacifica City Council 4
August 11, 2025
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA AUTHORIZING THE
CITY MANAGER TO EXECUTE A VOLUNTARY COLLECTION AGREEMENT BETWEEN THE CITY OF PACIFICA AND HOMEAWAY.COM, INC
WHEREAS, the City of Pacifica has established a Short-Term Rental (STR) program, which includes the collection of Transient Occupancy Tax (TOT) pursuant to Pacifica Municipal Code Chapter 3-7; and
WHEREAS, the City currently has a Voluntary Collection Agreement (VCA) in place with Airbnb but lacks a similar agreement with HomeAway.com, Inc. that manages the VRBO hosting platform, the second-largest online STR platform operating in the City; and WHEREAS, the absence of a VCA with VRBO has resulted in inconsistent tax collection and enforcement challenges; and
WHEREAS, the proposed VCA provides a mechanism for automated collection and remittance of TOT and PTMD on behalf of hosts, while reducing administrative burden and enhancing compliance; and
WHEREAS, entering into this agreement is consistent with the City Council’s priorities related to fiscal sustainability, regulatory fairness, and effective implementation of the City’s STR program;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pacifica hereby approves the Voluntary Collection Agreement between the City of Pacifica and HomeAway.com, Inc, and authorizes the City Manager to execute the Agreement and take all necessary steps to implement its terms.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 11h day of August, 2025, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
_________________________________
Pacifica City Council 5
August 11, 2025
Sue Beckmeyer, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney