By Matthew Miller
mlive.com
(TNS)
The short-term vacation rental platform HomeAway has sued Michigan’s Department of Treasury, disputing an $18.8 million use tax bill levied for the years 2020 through 2022.
The company, which operates Vrbo.com, said in a complaint filed in the state Court of Claims that people who use the platform to rent out their properties are responsible for paying the state’s use tax.
“At no time during the audit period did payouts to HomeAway include any amounts for applicable taxes,” the complaint said.
A HomeAway spokesperson and an attorney representing the company declined to comment on the case, as did a spokesperson for the state Department of Treasury.
The company offers hosts three options for collecting taxes, it said in the complaint. One of those options—collecting taxes per person per night—doesn’t apply to Michigan because it’s not the way Michigan’s use taxes are structured. In cases where the host chooses another option, agreeing to collect and remit the taxes themselves, the state said HomeAway was not responsible doing so, according to the complaint.
It is the third option that’s at issue.
“The Department—for the first time during the audit—alleged that for all bookings for which tax was collected on behalf of and at the request of the Host, HomeAway unjustly enriched itself by failing to remit the collected taxes to the Department,” the complaint said.
The allegation of “unjust enrichment due to the retention of use tax is erroneous,” the complaint said, “as Plaintiff did not receive any benefit from the use tax collected and disbursed to the Hosts for remittance.”
The Treasury Department billed HomeAway for $15.1 million in use taxes and an additional $3.7 million in interest in September.
The company alleged in the complaint that the state had asserted that HomeAway was unjustly enriching itself during the audit process, which began in 2023, and that the final assessment violated the state and federal equal protection laws.
“There is no precedent to support the Department’s allegation,” the complaint said, “nor has the Department applied this theory to similarly situated taxpayers.”
Photo caption: A Vrbo short-term rental sign in Muskegon, Michigan, on March 8, 2024. (Lynn Moore/mlive.com/TNS)
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©2026 Advance Local Media LLC. Visit mlive.com. Distributed by Tribune Content Agency LLC.
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